A minimum-wage increase in Illinois: Helping working families in the Land of Lincoln

The Illinois state legislature begins its next session this week and will likely debate a bill that will raise the state minimum wage from $8.25 to $10.65 over four years—providing a substantial boost to the state’s lowest-paid workers and the economy. The measure will mirror a similar proposal from last year, S.B. 1565, which would have raised the minimum wage in four steps and, after reaching $10.65, would have tied future increases to inflation. That measure would give 1.1 million low-wage workers a raise, providing more than $3.8 billion in increased wages for directly affected workers.

During the last 30 years, the real value of the Illinois minimum wage has eroded and working families’ incomes have essentially stagnated, reflecting the rest of the nation’s growing wage inequality. Restoring Illinois’ minimum wage to its pre-erosion level would help to return it to its original intent as a policy that sets wage standards for low-wage workers at a level that is high enough to be meaningful. Restoring the value of the minimum wage through incremental annual increases will ensure that it never again strays from its original purpose as a basic protection of fair wages.

We know that a minimum-wage increase will boost the earnings of working families in Illinois—an added bonus is that it’s a tool for economic growth. It spurs spending by the workers who get the raise, thereby increasing economic activity and, in turn, creating jobs. It’s time that the American worker starts to share in the prosperity that corporate America has enjoyed—thanks to the growing productivity of workers—since the 1970s. A minimum-wage increase in Illinois would mean a shift from corporate profits to the America worker and would start to reverse the trend of increasing inequality evident since 1973. While corporate America enjoyed more than 200 percent growth in profits from 1973 to 2006, the real value of the Illinois minimum wage in 2010 was only 14 percent higher than it was in 1973. During the same period, American workers’ productivity increased almost 100 percent. The graph below shows this overwhelming disconnect:

Keeping the real value of the Illinois minimum wage at a level that allows low-wage workers to afford basic necessities is  a policy that Illinois families cannot afford to lose—most minimum-wage workers are at least 20 years old and have total family incomes of less than $45,000. The consumer spending of workers affected by this increase will create a direct stimulus effect, pumping more than $2 billion into the economy and creating 20,000 jobs.

Amid persistently high unemployment (9.8 percent in Illinois), a resulting lack of wage growth, and a severe jobs deficit in Illinois, there will be no upward pressure on wages for a very long time. Since raising the minimum wage helps working families, does not cause job loss, and is a boost to the economy, now is exactly the time to increase the minimum wage.


  • Cecelia

    yep… min. wage goes up… then so does prices for food, living. etc… Great Job ILLINOIS!!!!! ONCE AGAIN!!!!!

  • GA

    EXACTLY…yeah wages will be higher…but hours will be cut to compensate…and all prices for EVERYTHING that uses min wage help will rise…NOT a smart idea illinois…

  • Cecelia

    Do ya’ll know exactually what you are doing???  There are suppliers, companies that will move their business our of Illinois!!!!  The cost  of wages will overcome any profit that any company can have to make a living… Illinois will cost Companies $$$$$$$$$$$$$… those people will LEAVE ILLINOIS… the MORE People will HAVE NO JOBS!!!!.. Get real ILLINOIS… Illinois has one of the Highest min. wages of all states…… BAD CHOICE BAD BAD BAD ILLINOIS… do not do this!!!!

    • http://www.epi.org Economic Policy Institute

      Approvr

  • lori

    you people ought to be a shame argung what states are getting wage hikes i just wish the apple could be on the other side let the big spenders live off of min wages for instance john bohner we see himm in those 1,000 suits walking to the white house and lets not foget mcdonnel arrogance they need to live off min wage the tide would surely turn now the problem would be fix