Gov. J.B. Pritzker recently signed legislation that will increase Illinois’ minimum wage to $15 per hour by 2025, almost doubling the current $8.25 hourly wage.
Illinois will become the fifth state in the country to have a $15 minimum wage, joining California, New York, Massachusetts and New Jersey.
Chicago was already on its way to increasing its minimum wage, with a $13 per hour rate set to go into effect on July 1; that would be a $1 increase from 2018. Mayor Rahm Emanuel announced the gradual increase, up from $10.50 per hour, in December 2014. Cook County planned to make the minimum wage $13 per hour by 2020.
A statewide rate means businesses would have to leave Illinois—and not just Cook County—to pay lower rates, but the effects of moving to $15 per hour remain unclear.
It might be encouraging to see workers earning more, but the higher wages might not be a welcome prospect for business owners.
According to the Chicago Tribune, corporations could reduce the number of hours that employees work or utilize automation, such as touch-screen kiosks at fast-food restaurants. However, the Tribune also reported that people working jobs that could be replaced by machines will remain employed but will, perhaps, find other positions with their company.
The increase will likely be far more difficult on small-business owners, who might have to cut employees’ hours, not fill positions when employees leave and not give raises.
The national unemployment rate is decreasing, but more people are working at larger companies, which should be able to afford higher wages.
According to USA today, an ADP Workforce Vitality Report showed that in September 2018, small businesses throughout the country added 56,000 jobs, less than the 99,000 for midsize companies and 75,000 for large firms. Through much of 2018, small-business employment rose 1.2 percent compared to about 2.5 percent at larger companies.
Small businesses add vibrancy and character to their communities—one needs to look no further than the 19th Ward to see that.
The last thing any city or neighborhood needs is small businesses closing and empty storefronts on major corridors.
The thousands who supported the “Fight for 15” in recent years can celebrate a victory, but small-business owners might not be as lucky.