Workers welcome Illinois minimum wage increase, but businesses worry about added strain
Minimum wage workers in Illinois will earn another dollar per hour starting Jan. 1, but businesses already struggling with pandemic problems worry about how the increased cost will affect their bottom line.
Under a law signed by Gov. J.B. Pritzker in February 2019, the minimum wage increased in 2020 from $8.25 to $9.25 in January and then to $10 in July. This New Year, it will go up to $11. The wage will increase by $1 each New Year until 2025 when it reaches $15 per hour.
Tipped workers will earn $6.60, up from $6, as of Jan. 1, and workers who are under 18 years old and work fewer than 650 hours annually will earn $8.50 per hour. The youth wage will increase to $13 by 2025.
Asked if the state considered suspending the minimum wage increase because of the pandemic’s effect on small businesses, the governor’s answer was succinct.
“No,” Pritzker said at a news conference in Chicago recently. “We have a very long path, longer than some would have liked, for the raise in the minimum wage. ... This economy is going to recover, and we want, particularly people who are working at the lowest wages in our economy, the poorest working people in Illinois, we think that they deserve a raise.”
The increase is a necessary step toward “a decent standard of living,” said Steven Powell, president of the United Food and Commercial Workers Local 881. The union represents employees of grocery stores such as Schnucks, among other retailers and workers in other industries.
“The pandemic has revealed that many low wage workers are, in fact, essential to to fulfilling the vital needs of our communities. Almost overnight, many folks that previously had been taken for granted like grocery cashiers, pharmacy techs, and food production workers were praised for their heroic efforts during the public health crisis,” Powell said in a written statement. “What has been made crystal clear is although they are now classified as essential, their paychecks do very little to reflect that designation.”
This year’s minimum wage increase is expected to give a raise to 1.4 million workers in Illinois, Powell said. Prior to 2020, Illinois hadn’t seen a minimum wage increase since 2010 when it increased to $8.25.
Research by the Massachusetts Institute of Technology estimates a $16.51 minimum wage would be necessary to support a St. Clair County household with two full-time working adults and two children. In Chicago’s Cook County, that number increases to $17.06.
Small businesses will have to make adjustments, whether it’s changing workers’ hours or passing along the cost to customers.
Cory Flament owns Flamentco’s The Place Pizza with locations in O’Fallon and downtown St. Louis. Flament supports the minimum wage increase for his employees, but said it will cause some financial stress. His downtown location is already suffering from reduced foot traffic.
“We’re doing the best we can. We still have the lights on, still serving pizza every day,” Flament said. “We’re proud to be part of the advancement of wages, but at the same time it’s going to take some definite buckling down and making it happen.”
While his business has had a chance to grow and stabilize over the five years since he founded it, Flament says he worries about entrepreneurs who are just starting out. An increase in the minimum wage could be even harder on them, he said.
“It’s definitely a challenge when you’re going through a situation like a pandemic and trying to figure out how your business is going to survive, and then there’s a new mandated minimum wage,” Flament said.
In July, the Illinois Chamber of Commerce called on the legislature to put a hold on implementing minimum wage hikes during the pandemic, but lawmakers never took up the effort.
It’s all the same to Justin McLaughlin, who owns The Lory Theater in Highland with his wife. They’ve been closed since March and have no exact idea of when they’ll be able to reopen at full capacity.
“What I care about is am I going to survive COVID. I need to be able to have a business to be able to care about the minimum wage law,” McLaughlin said. “The minimum wage is a little bit of a sidenote, a secondary bridge. I would love to cross that bridge. I would love to have the opportunity to complain about minimum wage going up.”
The Lory Theater has survived thus far thanks to federal stimulus money and help from the owners’ hometown bank, and McLaughlin hopes movie theaters will receive another round of COVID assistance from the $900 billion package Congress passed this week.
The minimum wage increase is still likely to be a problem if and when the theater does reopen. Before the pandemic, the theater was a “month to month, barely making it” type of business, McLaughlin said. The owners hope to start another business, possibly a family entertainment venue, to help support the theater. But both businesses rely on a successful, effective vaccine.
“Surviving COVID? At this point that’s all that matters,” McLaughlin said.
