$15 an hour — now
Lightfoot endorses UIUC-ILEPI study urging accelerated hike in Chicago minimum wage
By Ted Cox
A new economic study urges Chicago to increase its minimum wage to $15 an hour as soon as possible in order to improve the lives of workers and stay ahead of the state’s move to the same level in 2025.
“Raising the Minimum Wage to $15 by 2021: Effects on Incomes, Employment, and Prices” was released Thursday by the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign and the Illinois Economic Policy Institute. It finds that “a fast-tracked $15 minimum wage by 2021 in the city of Chicago would increase paychecks for low-income workers and lift thousands of Chicagoans out of poverty,” according to an accompanying news release.
Illinois just moved to increase its minimum wage to $15 an hour this year in the first major policy initiative passed through the General Assembly by Gov. Pritzker. But it only actually increases the statewide minimum wage from the current $8.25 an hour to $9.25 with the new year, then to $10 next summer and in $1 annual increases after that until reaching $15 in 2025.
Chicago’s minimum wage only just moved to $13 an hour in July in a similar step-by-step piece of legislation passed five years ago. The study points out that, while the Chicago ordinance allowed for additional inflationary increases, they were capped from year to year. “As a result, the city’s minimum wage cannot rise to $15 per hour until 2025 at the earliest, and may not reach $15 per hour until after the rest of Illinois.”
“The cost of living is higher in the city of Chicago,” said study co-author and UIUC Professor Robert Bruno, head of the Project for Middle Class Renewal. “There has been a movement to raise the city’s minimum wage to $15 per hour over the next two years to boost the purchasing power of Chicago workers.”
Even five years ago, many Chicago alderman were already calling for the minimum wage to be raised to $15.
"The $13 is not enough, but it is a step in the direction we should be moving," said Alderman Jason Ervin.
"We need to get to $15, I still believe. But I believe we're making positive steps," added former Alderman John Arena, a lead sponsor of a $15 proposal that was lowered to $13 in a City Council compromise brokered by then-Mayor Rahm Emanuel.
“Raising the minimum wage has small or negligible effects on employment because it reduces worker turnover for employers and increases consumer demand by the working class.”
Professor Robert Bruno (Twitter)
Emanuel’s successor, Mayor Lori Lightfoot, endorsed the study’s findings on Friday and promised action on the initiative. “Ensuring Chicago adopts a $15 minimum wage by 2021 remains a top priority for Mayor Lightfoot,” said spokeswoman Lauren Huffman. “We agree with the broad finding of this study that there is more that we can and must do to transform the economic map of our city and better support working families. That’s why the Lightfoot administration has worked collaboratively to pass the nation’s most comprehensive scheduling legislation, and why we will again collaborate with the City Council, advocates, and labor leaders to advance legislation to accelerate the $15 minimum wage in the coming months.”
The new study finds that “a $15 minimum wage would raise incomes for over 430,000 Chicago workers.” It pointedly notes that the majority of those workers “are female, people of color, and at least 30 years old.” It would directly hike annual income by an average of $3,600 for those workers, in the process lifting an estimated 100,000 Chicago residents out of poverty.
“A $15 minimum wage would reduce income inequality and ensure that families can maintain a decent standard of living in the city of Chicago,” said Frank Manzo IV, study co-author and ILEPI policy director.
The study works to debunk worries that an additional hike in the Chicago minimum wage would cost jobs for workers and money for consumers in the form of higher prices — two common arguments from business interests.
It points out that cities that have hiked their minimum wage to $13 an hour have unemployment rates similar to Chicago, and “the three cities with minimum wages of at least $15 per hour — San Francisco, San Jose, (Calif.), and Seattle — have lower unemployment rates than Chicago.”
“This parallels the bulk of the economic research,” Bruno said. “Raising the minimum wage has small or negligible effects on employment because it reduces worker turnover for employers and increases consumer demand by the working class, offsetting any negative consequences.”
Similarly, the study projected that the effect on consumer prices would be minimal, citing that “between 2015 and 2018, when Chicago’s minimum wage went up by 46 percent from $8.25 to $12 per hour, food prices only increased 0.5 percent more in the Chicago area than the national average … about 3 cents for a Big Mac meal at a local McDonald’s.”
That was reflected in a previous Bruno-Manzo study on the impact of Chicago’s increased minimum wage over time. They also did studies on how an increase in the state’s minimum wage would benefit the Illinois economy and workers outside the Chicago area.
“This is why four out of every five Chicago residents supports raising the minimum wage to $15 an hour,” Bruno said. “A $15 minimum wage would build a strong Chicago economy with little to no downside.”
The U.S. House of Representatives passed a bill earlier this year that would hike the national minimum wage — currently still at $7.25 an hour — to $15 by 2025. But the proposal has never been taken up by the Senate in what critics have labeled a “legislative graveyard” under Majority Leader Mitch McConnell of Kentucky.