Minimum wage increases by $1 in Illinois
Springfield, Ill. – More than a half million Illinoisans are being paid more for whatever work they do. The state's minimum wage jumped to $7.50 an hour on Sunday with the start of the fiscal year.
The new wage gives Illinois the fifth-highest in the nation.
Lawmakers last fall approved the boost to a level that's even higher than the federal level. In each of the coming three years, it will rise an additional 25 cents, which means Illinois' minimum wage will be $8.25 in July 2010.
Gov. Rod Blagojevich has made such increases a centerpiece of his agenda, bucking the business community after election in 2003 to phase in a bump in the minimum by $1.35 over the federal level of $5.15.
Last fall, Blagojevich wanted to tie the wage to the cost of living, but dropped it in a concession to business. The law also allows employers to continue paying $0.50less than the minimum to workers younger than 18.
Business representatives fear the impact of increased costs on employers.
"In most cases it's likely to result in some reduction in benefits for existing employees, or a price increase, or a layoff or fewer hires," said Doug Whitley, president of the Illinois State Chamber.
Illinois joins 30 other states and the District of Columbia with pay floors higher than the federal rate, according to the U.S. Labor Department. Every Midwestern state except Indiana and Kentucky has wage levels above the federal line.
The Illinois increase will affect 647,000 workers, including those who already make more than the minimum but less than $7.50, according to a study last fall by Voices for Illinois Children. Of those, 144,000 are working parents caring for 269,000 children.
But it won't keep everyone out of poverty. Even at $8.25 in 2010, a 27% increase over the former rate, an employee would earn $17,680 a year, slightly above the current federal poverty rate of $17,170 for a family of three.
When Democrats took over Congress in January, they promised a hike at the federal level unchanged since 1997, the longest period without an increase since a minimum was established in 1938.
President Bush signed the increase in May and it takes effect July 25. It will rise in phases to $7.25 by July 2009.
Business advocates say the issue should be settled on a national, standardized basis, but Congress didn't act soon enough, Illinois AFL-CIO president Michael Carrigan said.
"We're not going to stand by and wait," Carrigan said. "These workers legitimately need a raise."