Illinois Democrats on Thursday voted to raise the state’s minimum wage to $15 per hour by 2025, a move that will give Gov. J.B. Pritzker an early political victory, grant pay raises to workers and upset businesses across the state.
Under the plan, the Illinois minimum wage would first rise from $8.25 per hour to $9.25 on Jan. 1, then gradually increase every year until it hits $15 per hour six years from now. Calls to have a higher minimum wage near Chicago than Downstate were ignored, so the plan approved Thursday would take effect statewide.
But he also risks alienating the Republican lawmakers and business interests he vowed to work with when he was sworn in last month.
And the issue reopened well-worn regional divides in Illinois, as lawmakers split over whether the Chicago area should have a higher minimum wage than Downstate areas, which often have a lower cost of living.
The Illinois House voted 69-47 to approve the wage hike as the new governor roamed the House floor, greeting lawmakers.
“Whether you’re a home health care provider in McLeansboro or a janitor in Rockford, hardworking men and women across Illinois deserve a raise and will get one,” the governor said.
Illinois’ minimum wage has been set at $8.25 per hour since 2010. Since then, Chicago has increased its minimum wage to $12 per hour, and Cook County’s is now $11. The city and county minimums each will increase by $1 per hour July 1. Under the bill passed Thursday, the statewide rate will increase to $9.25 per hour on Jan. 1 and to $10 on July 1, 2020. It will then increase by $1 per hour each year on Jan. 1 until hitting $15 in 2025.
Supporters of a wage hike contended that raising it would lift thousands of Illinois residents out of poverty and raise the pay of about 1.4 million people. For example, a single parent with two children who works 40 hours per week at the current statewide minimum wage would earn $17,160 annually — $4,170 below the federal poverty level for a three-person household.
At $15 an hour, the same 40 hours per week for 52 weeks would total $31,200.
State Rep. Will Guzzardi, D-Chicago, said on the House floor that $8.25 an hour “is a poverty wage in any corner of this state. If we want to lift people out of poverty, we need to pay people a fair and decent wage that respects the dignity of their work.”
Republicans and private-sector leaders spent weeks pushing back, saying the increased costs would hurt their businesses — and ultimately their workers — because they’ll have to cut employees’ hours, eliminate jobs or close their doors. Republican state Rep. Mark Batinick of Plainfield expressed concern for less wealthy areas where a $15 minimum wage could be harder for companies to bear.
“You think jobs are magically going to appear in those areas?” Batinick said.
Guzzardi said the final product follows years of negotiations. The legislature passed a similar bill in 2017, but then-Gov. Bruce Rauner vetoed it.
Pritzker has said ideas from Republicans and business groups were incorporated into the bill, but GOP lawmakers opposed it. He points to a provision that preserves the way restaurants and other employers with tipped workers count gratuities toward wages.
He also notes that labor unions and other advocates wanted the minimum wage to hit $15 per hour sooner. The federal minimum wage is $7.25 per hour.
This time the legislation preserves the so-called tip credit, which won the support of the Illinois Restaurant Association. The bill also creates a tax credit to help businesses with 50 or fewer employees offset some of the cost of wage increases. Employers would be able to claim a tax credit for 25 percent of the cost in 2020, and the credit would scale back annually, then eventually phase out.
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