How Illinois’ minimum wage will increase to $15 an hour by 2025
The state’s path to a $15 minimum wage could make life harder for school districts in Southern Illinois, officials say.
Gov. J.B. Pritzker signed the gradual increase of the state’s minimum wage into law Feb. 19. The minimum wage will increase from $8.25 to $9.25 on Jan. 1; to $10 on July 1, 2020, and $1 each Jan. 1 until 2025.
School officials throughout Southern Illinois say that while the law may not have an immediate effect on their budgets, over time, it could have a significant impact.
In Highland, where the school board is already struggling with which positions to add back to the payroll, District 5 Superintendent Mike Sutton said the increase will begin to affect the district’s budget in 2022, when the minimum wage will reach $12, slightly above the district’s lowest wage.
“It’s certainly going to have to be a cost that is calculated into the budget three, four, five years out,” Sutton said. “It shouldn’t impact us these first two or three years too much, but then the impact gets pretty significant.”
The district employs roughly 100 staff members who are paid less than $15 an hour. That includes program assistants, secretaries and custodians. At other districts, employees who fall under the $15 minimum wage include non-contracted bus drivers and cafeteria workers, groundskeepers and more.
Sutton said, in the long run, raising all 100 of those employees up to a $15 minimum wage will have a large impact on the district’s budget and could affect negotiations with employees who make more than $15 already.
“When it goes to $12, we’re going to be just below minimum wage at $11.90. We’re going to have to address that,” Sutton said. “There’s going to be a significant cost.”
He said contracted workers in transportation and the cafeteria will also see rising wages, which could lead to more expensive contracts between the school district and the contractors.
That’s on top of mounting staffing issues and pressure from the community to bring back certain programs cut during tough budgetary years. Sutton said the gradual wage increase will most likely have an effect on adding those positions back.
Worrying about contracts, future negotiations
Collinsville School District 10 Superintendent Robert Green said he also foresees the gradual increase having a sweeping effect on his district. He echoed Sutton’s worries about contracts, budgetary impacts and future negotiations with employees whose pay already is about $15.
“It is challenging at this point to estimate what the actual financial impact will be because a growing minimum wage could put pressure on other pay to rise, too,” Green said. “This ripple effect would result in increased salary costs across the board.”
Belleville Township District 201 Superintendent Jeff Dosier said while the district hasn’t done any concrete analysis on the effects of the wage increase, he expects it to affect the budget.
“We have some employees that when it goes into effect we’ll have to move their pay rates up, so that will have an impact, but we don’t have an analysis or breakdown on that yet,” he said.
Dosier said one positive takeaway is that the increase to the pay rates will take place over time, giving the district time to prepare for a changing budgetary situation.
O’Fallon School District 90 Superintendent Carrie Hruby said the first few yearly wage increases will only affect the district’s substitute teachers, who currently make $8.35 an hour. She said there are already plans in place to raise their rate before Jan. 1.
When it comes to other hourly positions she said she’s not worried, but expects an impact eventually. For a large amount of hourly employees who fall under the $15 mark currently, by 2025 they would be making that much even without the new legislation.
“Most likely many of our positions would be seeing an annual increase anyway,” Hruby said. “Every few years we would need to increase those anyway so it’s potentially among our expected increases already.”
There are pros and cons, district official says
For Belleville District 118, there are pros and cons. Assistant Superintendent for Finance Ryan Boike said the district wouldn’t be feeling a real effect for the first few years to the wage increases. Currently, the district doesn’t pay anyone under $10 an hour.
“I don’t think, from a financial standpoint, that the increase would impact us until 2021 or possibly 2022,” Boike said.
However, he added, in later years the increase could begin to cause trouble for the district’s budget. He said while time gives Belleville 118 an advantage, there still could be financial issues if revenue from the state remains stagnant.
“The downside is that it’s going to have a negative impact on the budget,” Boike said. “If there is no additional revenue from the state that creates a problem.”
Boike did see a positive side to the wage increase. He said with better pay, better candidates are more likely to come to school districts in Southern Illinois.
School districts could be in for a second wave of budgetary issues as the state’s legislature looks ahead to a bill in the General Assembly that would gradually increase teachers wages to a minimum of $40,000 a year.
The bill would phase in the new minimum wage starting with a $32,076 minimum in the 2020-21 school year, $34,576 the year after and $37,076 in the third year.
The minimum wage for Illinois teachers has been stagnant since 1980, when it ranged from $9,000 to $11,000 based on an individual’s education level and semester hours worked.
The bill, SB10, recently passed through the Illinois’ House Education Committee who gave a nod to the wage increase.