The debate over raising the Illinois minimum wage is happening on two levels. Statewide, Gov. Pat Quinn advocated an increase from the current $8.25 an hour to $10. In Chicago, a mayoral commission has recommended and Mayor Rahm Emanuel supports raising the city’s minimum wage to $13 an hour. The debate is split on party lines, with Democrats in support and Republicans opposed.

This Scott Stantis cartoon appeared with the Chicago Tribune’s July 16 editorial under the headline, “Minimum wage hike imperils Chicago job creation.”

Chicago Tribune cartoonist Scott Stantis, minimum wage

 

 

From the editorial:

When City Hall forces businesses to pay higher wages, will more employers move to that city? Will more people land jobs? Will the local economy grow, raise demand for workers and push up wages at all income levels?

Ask anyone who employs lots of people or only a few. Mandating a higher minimum wage threatens jobs today and job growth tomorrow. It forces businesses to offset the costs. Small companies, the engines of the U.S. economy and the first employers for many young people, have the least elasticity. Some will raise prices and alienate customers; many others will simply slash payroll. “We put our entire life savings into it,” Cheri McEssy, owner of a Chicago-based BrightStar franchise, says of her home health care business. “If I have to pay $12, $13, $14 an hour, there’s really no chance for my survival.”

McEssy has reason to worry. So does every Chicagoan faintly hoping this city attracts more employers. More jobs.

The Tribune uses North Dakota, where unemployment is a mere 2.6 percent and the minimum wage is the federally mandated $7.25 an hour, as a case study in why government shouldn’t be the driving force for wages. Wal-Mart in North Dakota is advertising cashier jobs for $17.40 an hour — a wage that has been driven up by the state’s thriving economy, the Tribune says.

When City Hall forces businesses to pay higher wages, will more employers move to that city? Will more people land jobs? Will the local economy grow, raise demand for workers and push up wages at all income levels?

Ask anyone who employs lots of people or only a few. Mandating a higher minimum wage threatens jobs today and job growth tomorrow. It forces businesses to offset the costs. Small companies, the engines of the U.S. economy and the first employers for many young people, have the least elasticity. Some will raise prices and alienate customers; many others will simply slash payroll.

The same goes for state government and the effort for a $10-an-hour minimum, a question on which voters will get to weigh in on Nov. 4.

If Springfield raises minimum wages statewide, lawmakers invite the same responses from employers that a Chicago-only increase threatens: Is this the right place to grow my business? Or should I be in Wisconsin, or Indiana, or Michigan, or Iowa, or Missouri?

Raising the minimum wage may be good politics, but it’s risky in the delicate economic climate of Illinois, already saddled with the fourth-highest unemployment in the nation, and in Chicago, with higher unemployment than other large cities endure.

Illinois has the highest minimum wages among its neighbors. To see the difference in minimum wages in the region, see this infographic.

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