Gov.-elect J.B. Pritzker this week announced his Job Creation and Economic Opportunity Committee, which features members of the labor and business communities. One member, the president of an Illinois business group, is asking state policymakers to consider the full effects of a proposed raise to the state's minimum wage.
Pritzker said increasing the minimum wage in Illinois is important to him, but didn't say how high he thinks it should be raised. He said he’d like to get something done within the first six months of his term.
Illinois Retail Merchants Association President and CEO Rob Karr, who’s on Pritzker’s Job Creation and Economic Opportunity Committee, said he didn’t want to speculate about what Pritzker’s minimum wage would be, but said it will likely affect two-thirds of the state’s consumers.
“We forget how bordered our state is and that consumers have options to go elsewhere,” Karr said. “So you can’t just completely pass off price increases to consumers, you also have the pressures from remote sellers who will not all be subject to this wage increase.”
Karr expects lawmakers to raise the state's minimum wage, especially since the legislature in 2017 passed a bill to increase the state’s minimum wage over time to $15 an hour. That measure was vetoed by outgoing Gov. Bruce Rauner. Rauner said that he wanted to help low-income families to get out of poverty, but that increasing the cost of business wasn’t the answer.
"Mainstream economic theory and mainstream economic evidence strongly suggest that an increase in the minimum wage of this magnitude will hurt the very individuals it seeks to help," Rauner wrote in his 2017 veto message.
Karr said employers faced with higher minimum wages will be forced to decide between younger, less experienced workers and more experienced older workers.
“Are you going to take the gamble on someone with no skills or who’s 17 [years-old], or are you going to take the gamble on perhaps the retired individual who wants to supplement their income an extra 12 hours a week,” Karr said. “You’re probably going to take the gamble on the older person.”
The Illinois Retail Merchants Association remained neutral in the governor’s race.
The National Federation of Independent Business endorsed Gov. Bruce Rauner for re-election. NFIB Illinois State Director Mark Grant said Pritzker signaled during the campaign that he supported a $15-an-hour minimum wage.
“That just won't fly, you can’t do that to businesses here in Illinois,” Grant said. “I don't care if they’re in Cook County, I don't care if they’re in Madison County, I don’t care, you know, Adams County on down to Sangamon County and southern Illinois, you just cannot do that to businesses, it will really hurt them.”
He said NFIB and other groups will have step in to “blunt this as much as possible.”
Grant said policymakers must consider rural businesses.
“They don’t have the capacity to raise prices, that they’re going to have to raise obviously,” he said. “You’re gonna be looking at businesses who are going end up probably laying people off or trying to figure a way to slightly increases prices.”
Some advocates have proposed increasing the minimum wage to $15 an hour by 2022.
Chicago’s minimum wage is $12 an hour and is on the trajectory for a minimum wage of $13 per hour by July 1, 2019, with the increase being linked to the consumer price index the following year. Cook County’s minimum wage is $11 and increases to $13 per hour by July 1, 2020.
Illinois' existing minimum wage is $8.25 an hour, a dollar more than the national minimum wage of $7.25. The state’s minimum wage outside of the Cook County is higher than all neighboring states except Michigan’s $9.25 an hour.
Missouri's minimum wage increases to $8.60 and hour Jan. 1 after 62 percent of its voters in November approved a proposition to increase the rate to $12 by 2023.