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CHICAGO — Among various policies that former Illinois Gov. Rod Blagojevich has touted as proving he fought for the common man was a 2006 bill that raised the state minimum wage automatically each year through 2010. Several days after Blagojevich was convicted on 17 federal corruption charges, minimum wage workers in Illinois began July 1 without any increase in minimum wages for the first time in five years.
The state minimum wage currently stands at $8.25 ($7.75 for minors and people in the first 90 days with an employer) and $4.95 an hour for tipped employees. (Restaurant workers are calling for a higher federal minimum wage for tipped employees, as I blogged about last week.)
In Chicago, the state minimum wage is still several dollars below what is considered a living wage. At a press conference in Chicago Thursday, labor leaders, workers, pastors and business owners who are part of a coalition called Raise Illinois called to increase the state minimum wage to make up for de facto decreases in the minimum wage since it has failed to keep pace with the cost of living.
Though Illinois has one of the country’s highest state minimum wages, it is still significantly lower than what the minimum wage would be if the first Illinois minimum wage of $1.60 an hour in 1969 had been increased proportionate to the cost of living. Had the minimum kept pace with inflation, it would be above $10 an hour by now, according to the coalition. Increasing the state minimum wage to at least that level is the goal of a Senate bill the coalition is supporting.
Adam Kader, director of the workers center for the group ARISE Chicago (and an occasional contributor to this website), noted that much projected job growth in this economy is in minimum wage jobs or jobs that pay just slightly above minimum wage, including in fast food restaurants, big box retail stores, warehouses, cleaning and maintenance and other low-skill service sectors.
“It’s not just young people, people working over the summer or part-time workers who earn minimum wage,” he said. “More and more new jobs are in the minimum wage bracket.”
An increase in the minimum wage also affects a significant tier of workers who earn one step above minimum wage, Kader notes, since many employers peg their wages to the minimum wage, promising to pay 25 cents or 50 cents above it. That is the case, for example, with a new Walmart planned for Chicago’s South Side Pullman neighborhood.
The Chicago event also featured the groups Action Now and Women Employed, SEIU Healthcare Illinois and Indiana, homecare and other workers and interfaith leaders. The coalition’s website says:
At $8.25 an hour, or $16,500 a year, minimum wage workers cannot afford to provide for their families’ basic needs. In this recession, corporate profits and CEO pay are increasing dramatically, while ordinary working Americans are struggling to survive.
The Illinois legislature has been helpful to big businesses by providing workers compensation reform, which reduced costs for businesses, and the Governor offered tax subsidies to huge corporations like Motorola and Sears.
Unfortunately, Illinois elected officials have forgotten about working Americans, especially minimum wage workers who received a reduction in real wages this year.
A fact sheet from the Raise Illinois coalition says:
A raise in the minimum wage helps low-income households who immediately put the money back into the economy at the local grocery store, barber shop or gas station. The Economic Policy Institute estimated that the 2009 federal minimum wage increase from $6.55 to $7.25 an hour would generate $5.5 billion in new consumer spending. A robust minimum wage can help build a sustainable economic recovery– without increasing costs to taxpayers.
On June 7, the Center for American Progress hosted a panel of experts describing how a higher minimum wage should be expected to stimulate the economy, even during an economic crisis.
When Illinois’ 2006 minimum wage bill was passed, a press release from Blagojevich’s office touted the achievement.
Despite predictions from opponents of the minimum wage that its increase would harm the economy, since the Governor’s first minimum wage hike went into effect in January 2004, Illinois has added more than 152,000 new jobs, which is more than any state in the Midwest according to the Federal Bureau of Labor Statistics (BLS).
Illinois has led the nation in job growth twice this year (April and July), which has never happened before in recorded history, and has been named the third best state in the nation for attracting new and expanded corporate facilities by Site Selection Magazine.
Inc. Magazine recently named Gov. Blagojevich as the second best Governor in the nation for fiscal policy (Blagojevich was also named the top governor for health care policy). In addition, the unemployment rate has fallen from 6.7 percent in January 2003, when the fight for the higher minimum wage began, to 4.1 percent today, which is the state’s lowest level on record.
While the praise for the former governor now seems humorous, the economic impact of his actions on the state minimum wage are no less relevant today.
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