SPRINGFIELD, Ill. (IRN) – Small businesses aren’t happy about a proposal to increase Illinois’ minimum wage to more than $10 an hour, which would make this the best paying state in the nation.
Doug Knight, who runs Knights Action Park in Springfield, says he had to cut hours and employee pay last time the minimum wage went up. It’s the largest theme park in Central Illinois, but Knight says it’s getting hard to compete.
“If my expenses go up, I have to raise my prices,” he says. “How high can I raise my prices and expect to hang onto my customers before I lose them to somebody else in another state that charges less for a product like mine?”
A Senate committee has approved a measure to increase Illinois’ minimum wage to roughly $10 an hour. It would provide a flat 50-cent increase to $8.75 on July 1, then add more to return the wage to “historic levels:” $10.03 today is what $1.60 was in 1968. The wage would then increase annually on July 1 based on changes to the Consumer Price Index.
The bill eliminates the training wage, which allows businesses to pay training employees lower than minimum wage. Restaurants are concerned as this measure eliminates the tip credit, which allows them to pay tipped employees 60 percent of the minimum wage.
“An average profitable restaurant has a margin of 5 percent right now,” says Mike Noonan of the Illinois Restaurant Association. “If we’re to eliminate the tip credit, and take that 40 percent credit away, restaurants all over will have to close.”
“If you’re willing to work a 40 hour week, you shouldn’t live in poverty,” says sponsoring State Sen. Kimberly Lightford (D-Maywood). “An individual working 40 hours on our current minimum wage, they make about $16,000 a year.”
Opponents contend it shouldn’t be someone’s goal to raise a family on a minimum wage, and favor fostering an economy which encourages people to get an education so they can get good paying jobs with benefits. Plus, opponents say an increase in the minimum wage does little to help the wage earner, as higher wages mean businesses have to make up for it by charging more for their products, only serving to increase inflation even further.
The measure, S.B. 1565, passed a committee on a party line vote, all Democrats in favor, all Republicans against, and it now moves to the full Senate.