Analysis: $15 Minimum Wage No Windfall for Workers

Daily Herald (Arlington Heights, IL), February 13, 2019 | Go to article overview

Analysis: $15 Minimum Wage No Windfall for Workers


Byline: John O'Connor AP Political Writer

SPRINGFIELD -- Nearly a quarter of workers in Illinois would see their pay almost double under a proposal nearing final approval in the legislature, but inflation will take a huge bite by the time the state's minimum wage reaches $15 an hour in 2025.

The statewide pay floor has remained at $8.25 since 2010, and new Democratic Gov. J.B. Pritzker made boosting it a central component of his successful campaign.

The Senate last week approved a gradual hourly increase to $15, and the House is poised to send the legislation to Pritzker to sign before he presents his first budget plan on Feb. 20.

Illinois would join Washington, D.C., and at least four other states with a $15-an-hour minimum by 2025, an 82 percent spike in current base pay. But it might not be the momentous impact on low-wage workers that some supporters expected.

Using state labor and federal inflation statistics, The Associated Press projected that assuming the current inflation rate of 2.1 percent each year through 2025, $15 then would be worth the equivalent of $10.46 now.

So instead of an 81 percent wage increase from $8.25 to $15, after inflation, low-wage workers would be taking home only 27 percent more than they are today.

"Given the business opposition, you'd think that the state was proposing to give away bags of money and shut down every burger joint along the border," Robert Bruno, a labor professor at the University of Illinois, said after reviewing the AP's numbers.

Bruno co-authored of studies on the impact of minimum-wage increases in Illinois for the university's Project for Middle Class Renewal and the Illinois Economic Policy Institute.

They found that increases reduce worker turnover, trimming employer costs, and correlate with only a small cut in the number of hours employers can offer minimum-wage employees and a small increase in consumer prices.

"Increasing the minimum wage is a reasonable and evidence-based way to help working families earn a livable income," Bruno said.

Business owners complain that the phase-in is too fast. …

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