House GOP Opposes Costly, Job-killing Minimum Wage Hike

Illinois has long had a reputation for being unfriendly to job creators. With our excessive workers’ compensation insurance costs, high minimum wage and higher taxes, we cannot afford to do any further damage to our business climate.

Unfortunately, Illinois Democrats continued their assault on small business by passing a large increase in the minimum wage this week. Senate Bill 1 will incrementally increase Illinois’ minimum wage to $15 an hour by 2025, which is an 82% increase in labor costs.

Illinois’ current minimum wage is $8.25 an hour, a dollar above the federal level. When SB 1 is fully enacted, Illinois will join New York and California with the highest minimum wage in the nation. Illinois already has a higher minimum wage than most of our surrounding states:

  • Indiana: $7.25 / increases tied to the federal rate
  • Iowa: $7.25 / increases tied to the federal rate
  • Kentucky: $7.25 / increases tied to the federal rate
  • Missouri: $8.60 / tied to annual cost of living factors determined by the CPI index and increasing, incrementally to $12.00/hr on January 1, 2023
  • Wisconsin: $7.25

While Democrats argue that it should be a “living wage,” the reality is that the majority of minimum wage jobs are held by those just entering the workforce. Numerous studies have demonstrated that increasing the minimum wage leads to job losses for low-wage workers. No wage is enough if there isn’t an opportunity for a job.

After Illinois raised its minimum wage in 2010, unemployment among teenagers and part-time workers went up. Business owners cannot simply absorb the higher cost of doing business. They are forced to cut their workforce or go out of business.

Businesses have a limited ability to raise prices to make up for the cost of a higher minimum wage. Two-thirds of Illinois’ population lives within a 40-minute drive of the state border. With higher gas, liquor, tobacco and sales taxes, this will create yet another reason for these people to shop across the border.

Democrats argued that the tax credit included in SB 1 will help offset the costs to Illinois businesses. However, this tax credit is not meaningful and is rather deceptive. Any employer that pays more than the minimum wage is not eligible for the tax credit. Any employer with more than 50 employees is not eligible. A single grocery store, restaurant, movie theater, etc. may have more than 50 employees, making them ineligible for the tax credit.

Beyond the lost jobs and higher costs to Illinois businesses, the Democrats’ minimum wage hike will have a massive fiscal impact to the State of Illinois.

The Pritzker Administration estimates the cost to the State to fully implement a $15 minimum wage at more than a BILLION dollars. Their estimates are less than the estimated cost increases for nursing homes alone. The billion dollar cost estimate also leaves out the massive costs to K-12 schools, higher education, counties, municipalities, park districts, etc. All of these costs will be passed along to Illinois taxpayers.

Increasing Illinois’ minimum wage will hurt our small businesses that are struggling to stay afloat in a difficult economy. We cannot afford to lose any more jobs. We cannot afford the billions of dollars in additional costs to the State and local governments. That is House Republicans unanimously opposed raising the minimum wage to $15.

It should be noted that four House Democrats joined with House Republicans in bipartisan opposition to SB 1, which passed the House Thursday on a vote of 69-47-1. The measure now goes to Governor Pritzker for his signature into law.

Comments are closed.