Illinois lawmakers are moving swiftly on legislation that would raise the state’s minimum wage to $15 an hour. The bill passed the Senate on Thursday, and if it is signed into law, it would be a dramatic increase over the current $8.25 minimum.
Right now, it doesn’t look like there’s a way of stopping the legislation. But for the Quad-Cities’ sake, we hope the House and Gov. J.B. Pritzker will take into account the upheaval it will cause in border areas like ours if this proposal passes.
The Senate bill calls for a six-year phase-in period for the new wage. The current minimum of $8.25 would rise to $9.25 next Jan. 1. After that, it would increase to $10 an hour on July 1, 2020. After that, $1 would be added to the minimum wage every Jan. 1 until it hits $15 an hour on Jan. 1, 2025.
Let's be clear: We believe workers need a pay raise. Income stagnation across the United States and in the Quad-Cities is real. But we think the state needs to be smart and take into account how costs vary across Illinois. What seems reasonable in Chicago — whether it’s the cost of housing or what a business can charge its customers — is far different than in Moline and Rock Island.
Already, representatives for Quad-City businesses are sounding the alarm.
"There are very few areas throughout the state that would feel the impact of this like we would because we’re a bi-state region," Tyler Power, the manager of government affairs for the Quad-Cities Chamber of Commerce, said last week. "We could see businesses close Illinois locations and move directly to Iowa. Or, they could move outside of the entire region and take those jobs and revenue with them due to the disparity of minimum wage between the two states."
Eighty-six percent of the 140 member businesses it surveyed said the change would have a negative impact, the chamber said.
We have seen the arguments citing studies that say raising the minimum wage will not cause a loss of jobs. Frankly, there are studies all over the map. But how many of those have looked at disparities like what would exist here if this bill comes to pass?
Iowa’s minimum wage is $7.25 an hour, and with Republicans controlling state government in Des Moines, that shows no sign of changing anytime soon.
That means in less than two years, Illinois’ minimum wage would be $11 an hour under this bill, nearly $4 an hour higher than in Iowa. In 2025, it would be more than double Iowa’s minimum wage, if it did not change. The last increase in Iowa, by the way, was in 2008.
We would note that this bill wouldn’t be such a big change for Chicago, where the minimum wage currently sits at $12 an hour and is set to rise to $13 this July.
Frankly, that doesn’t make sense to us.
Already, Chicago and the collar counties have economic advantages that areas like the Quad-Cities just can’t match.
To throw such a big change at businesses in this area in a shorter time span seems unfair.
The Illinois Retail Merchants Association has called for recognition of these regional variances and has pushed for a longer phase-in period and a regional wage structure.
That’s an approach we would support. In addition, we think tax credits aimed at mitigating the cost of such dramatic increases for businesses with fewer than 50 employees must be more generous than what is in the current proposal.
A 25 percent credit that, according to news reports, mostly phases out by 2027 is insufficient.
For years, economic conditions in our community have been uneven, with Iowa outpacing Illinois. Unemployment has tended to be higher in Rock Island County, and there has been a flight of people to Iowa.
We believe this will exacerbate the problem, which we don’t think is good for the region as a whole. We stand and fall as one Quad-Cities.
We would hope that Gov. Pritzker, who spent a good amount of time in our community during last year's campaign, would realize that what works in Chicago doesn’t necessarily work here.
We will say it again: We believe that wages need to rise in Illinois and in the Quad-Cities. But on the minimum wage, we also believe the state should take a balanced approach, respecting workers and businesses alike.