Illinois has joined the $15 minimum wage club, though it’ll take a few years to get there. Governing magazine reports,
Low-wage workers across Illinois will ring in 2020 with a $1-per-hour raise after Gov. J.B. Pritzker on Tuesday signed a bill that sets the state’s minimum wage on a path to reach $15 per hour by 2025.
Pritzker signed the bill into law Tuesday morning during a ceremony at the Governor’s Mansion in Springfield, making Illinois among the first states to approve a minimum wage of $15 per hour, a goal set by the labor-backed Fight for $15 movement. California will hit that level in 2022, Massachusetts in 2023 and New Jersey in 2024. New York’s minimum wage eventually will reach $15 per hour statewide through a series of increases tied to inflation.
The state, like Washington and a number of other states, Illinois has a major metro area with an economy unlike that of more rural parts of the state. Unsurprisingly, downstate business owners argued for regionalization.
Business leaders from several different industries were at the Capitol Monday [February 11] urging lawmakers to amend the proposed $15 minimum wage bill. They’d like to see a regional component put in, so the cost of living is factored in when figuring out the breakdown of the minimum wage.
The Governing story continues,
Republicans and business interests continued sounding warnings that rising wages will lead employers to cut workers’ hours, eliminate jobs, invest in automation or close their doors. GOP lawmakers and business groups called for lower minimum wages in the collar counties outside Chicago and downstate to account for the lower cost of living in those areas.
Businesses already are evaluating how a higher minimum wage will affect the bottom line and beginning to plan accordingly, said Rob Karr, president and CEO of the Illinois Retail Merchants Association, which led the push for a minimum wage that varies by region.
We’ve written a lot about Washington’s minimum wage, including a post last month citing a Governing story that found Seattle’s minimum wage “comes at a cost to some workers.” The evidence seems clear that employers in Washington’s major metro have adapted in ways that have benefitted some workers while reducing hours for young and unskilled workers. Eater New York reports on a similar adaptive strategy among restauranteurs in NYC.
In a survey conducted by New York City Hospitality Alliance late last year, about 75 percent of the more than 300 respondents operating full-service restaurants reported they’ll reduce employee hours this year because of the new wage increases, while 47 percent said they’ll eliminate jobs.
“There’s a lot of concern and anxiety happening within the city’s restaurant industry,” says Andrew Rigie, executive director of the restaurant advocacy group. Most restaurant owners want to pay employees more, he says, but are challenged by “the financial realities of running a restaurant in New York City.”
Last year, in the Wall Street Journal, Rep. Terri Sewell, a Democrat who represents Alabama’s Seventh Congressional District and . Jim Kessler, senior vice president for policy at Third Way, a centrist think tank in Washington, wrote that the federal minimum wage should recognize regional differences.
It’s time to rethink the national minimum wage. It’s too low at $7.25 an hour, but there’s a reason Congress hasn’t voted to raise it since 2007. Think Spokane, Wash., Midtown Manhattan and Selma, Ala.
In Spokane a 2,700-square-foot home with four bedrooms and two bathrooms is on sale for $165,000, with a $600 monthly mortgage—roughly what New Yorkers pay to rent a parking spot. In Selma, the median home is valued around $90,000, according to Niche, a company that analyzes real-estate markets. The idea that Spokane, Manhattan and Selma should share the same minimum wage is nonsensical and unfair to low-wage workers everywhere.
Instead, America should have a minimum wage that provides roughly the same standard of living across the country. Regional minimum wages would be based on the cost of living. Under our proposal, medium-cost Spokane would have a minimum wage of $11.30, half the median hourly wage of American nonsupervisory employees, according to the Bureau of Labor Statistics. This would approach the highest inflation-adjusted national minimum wages of all time in the U.S. In New York City, the minimum wage would be $12.70; in Selma, $9.80.
If that thinking makes sense to you, so too should the notion of regional differences with a state, particularly a state marked by wide variation in regional economies. Seattle, Chicago, Atlanta, and the Twin Cities have economies – wealth, cost of living – much different from non-metro Washington, Illinois, Georgia and Minnesota, to cite just four examples.
Oregon has recognized that, providing a different minimum wage for Portland and nonurban counties.
In Olympia, Rep. Skyler Rude (R-Walla Wall) has proposed legislation to study a similar idea here, My Columbian Basin reports.
“It’s no secret the cost of living in Seattle varies greatly from the cost of living in communities like Prosser, Dayton, and Waitsburg. For perspective, the median household income in King County is just under $90,000. The median household income in Columbia or Benton counties is roughly between $40,000 and $60,000,” Rude said. “Yet, every county, regardless of cost of living, operates under the same state minimum wage rate, which is currently $12 an hour and will increase to $13.50 next year. This kind of blanket policy seems unfair to employers and employees in counties that are still recovering from economic crisis.”
Rude stated he is pursuing legislation that would study regionalizing Washington State’s minimum wage rate and points out that other states are doing this.
“In New York, rates vary based on geographical location and, in New York City, employer size. And our neighbors to the south in Oregon have a Portland metro rate different from the rest of the state,” Rude said.
Voters approved Initiative 1433 in 2016, setting the statewide minimum. Amending it would be an uphill battle. Arguably, as metro areas like Seattle and Tacoma set their own wage rates above the statewide minimum, the regionalization question is partially addressed under current conditions, though there remains a question of whether the statewide minimum still is too high for lower income, non-metro communities.