* From the Senate Democrats…
Nearly 1 million workers in 10 states rang in the new year with an increase in pay, thanks to those states raising their minimum wage.
Illinois’ minimum wage, however, remains at $8.25, where it’s been since 2010. Sen. Kimberly Lightford (D-Maywood) has been working to change that.
Of the 10 states, only one raised its minimum wage because of new legislation. The other nine raised their minimum wages automatically because of existing laws that require annual adjustments to keep pace with inflation, a process known as indexing.
Illinois’ minimum wage is not indexed, however, and minimum-wage workers have seen their purchasing power erode because of it. To match the purchasing power the minimum wage had in 1968, when spending power was at its highest, Illinois would have to raise it to $10.58, according to the latest figures from the federal Bureau of Labor Statistics.
* The Question: Should Illinois’ minimum wage be indexed to inflation? Take the poll and then explain your answer in comments, please.
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- Old and In the Way - Monday, Jan 28, 13 @ 11:05 am:
Wait a minute. Let me see if I have this straight. We recognize the impact of inflation on the wages of our lowest paid workers. Fair enough. Why then are we trying to cut the cost of living adjustments (COLA) to our pensions? Seems to me to be a bit inconsistent and unfair.
- MrJM - Monday, Jan 28, 13 @ 11:07 am:
I voted no because minimum wage jobs, like public sector jobs, aren’t real jobs and those workers don’t spend money on food, clothing, housing, fuel and healthcare in their local communities.
/sarcasm
– MrJM
- Belle - Monday, Jan 28, 13 @ 11:08 am:
Felt conflicted but went with yes. I realize it might be a drain on “some” small businesses but it certainly will not be an issue for WalMart.
- Downstate Illinois - Monday, Jan 28, 13 @ 11:09 am:
Our unemployment is high enough already. Our business climate is bad enough. A minimum wage doesn’t pull people out of poverty. Jobs do. Focus on job creation. Anything else and you’re putting a band-aid on a wound that requires surgery.
- USMCJanitor - Monday, Jan 28, 13 @ 11:12 am:
Looking at the list of states that have a minimum wage I believe only vermont has a higher one than Illinois. So saying “we havent raised it in X years..” well when you are top of the pile where is there to go?
Also What does raising the minimum wage do? I mean if arbitrarily changing the minimum wage actually did anything for the low wage earners it would have fixed the problem by now? Why not raise it to $20 or $50
See, if I raise the price of labor (arbitrarily) without requiring or getting more productivity or a better employee, I simply have to pass that cost on to consumers/purchasers of my products. When that happens to EVERY BUSINESS then products cost more. The same products that the min-wage earners buy… Thus it hasn’t helped those targeted has it? Now it may help some people that have contracts for wages tied to increases in Min-wage (X+minwage=their hourly). But thats it.
- Small Town Liberal - Monday, Jan 28, 13 @ 11:13 am:
- Why then are we trying to cut the cost of living adjustments (COLA) to our pensions? -
Those COLAs aren’t indexed to inflation either, think we should change that?
I vote yes, but I don’t see this happening any time soon.
Explanation? It seems silly to have minimum wage at a fixed amount when the value of that amount is continually decreasing. As noted, minimum wage earners were better off over 40 years ago, that doesn’t make sense to me.
- Steve Williams - Monday, Jan 28, 13 @ 11:16 am:
I voted no because automatic anything usually has unintended consequences when you can’t predict the environment (economy)in which those changes will be implemented. Additionally, I prefer to see advocates put together a business case justifying their position, which can be analyzed by all sides. In the above example, it seems Sen. Lightford cherry-picked the statistic that best justifies her position. For exmaple, why not pick the average spending power vs. the maximum?
- gathersno - Monday, Jan 28, 13 @ 11:20 am:
The minimum wage should be linked to inflation only when the COLAs to non profit organizations are also linked to inflation.
- Ahoy! - Monday, Jan 28, 13 @ 11:24 am:
–Nearly 1 million workers in 10 states rang in the new year with an increase in pay–
Those 10 states probably have a lower minimum wage than we do so our workers are still making more. Yet the Illinois economy is performing so poorly. I tend to think the Illinois minimum wage should reflect the national minimum wage, if people want to index that to inflation, go ahead, but it’s not going to offer the ROI those investments in education, infrastructure and research and development will.
- John Galt - Monday, Jan 28, 13 @ 11:36 am:
I voted no, for a multitude of reasons. The big reason is it doesn’t help those who it’s trying to help. It hurts the least skilled, least productive workers the most. It forces business owners to cut jobs our entirely for the least productive workers. Sometimes the greatest weapon an untrained person has to crack into the workforce is the willingness to work for cheap. College kids do free internships all the time, but an ex felon, a former stay at home parent re-entering the workforce, a teenager, or a person recovering from drug or alcohol dependency can’t have that same opportunity?
Secondly, every single surrounding state I believe just has a minimum wage that matches the federal rate. It puts Illinois at a competitive disadvantage.
Thirdly, I understand that a minimum wage is not a living wage. I understand that it can’t support a family. But that is not the purpose of minimum wage jobs in the first place. They’re meant as secondary or temporary income. It’s meant to get people entering that workforce that first job so they can start to build a resume and move on to a more demanding/specialized–and higher paying–job. It’s meant to allow retirees to slow that burn rate on the retirement savings they’ve had 40+ years to sock away. It’s meant to be a secondary income to somebody who’s already employed. It’s meant to slow the burn rate or make some ends meet when a person is in between real jobs in the midst of a job hunt or career transition.
But the concept that being a burger flipper or a check out clerk at Target is meant to support a life ong
An excellent 4 minute video explaining this can be found here:
http://www.youtube.com/watch?v=Ct1Moeaa-W8&feature=player_embedded#!
- veritas - Monday, Jan 28, 13 @ 11:38 am:
Downstate Illinois:
“A minimum wage doesn’t pull people out of poverty. Jobs do. Focus on job creation. Anything else and you’re putting a band-aid on a wound that requires surgery.”
I agree that a rising tide lifts all boats, but some of the swimmers made need a life-line to get on board.
- Chicago Bars - Monday, Jan 28, 13 @ 11:40 am:
If anyone wants to deep dive into historical minimum wage rates, the US Dept of Labor has this comprehensive page.
http://www.dol.gov/whd/state/stateMinWageHis.htm
Only a few places higher than IL already, none in our region.
Voted No (for now). Most small business owners I know would greatly prefer any minimum wage increase be deferred until they can figure out their obligations and liabilities under the Affordable Care Act. The guidance and cost forecasts on that are still nearly useless for all the small biz trying to figure it out. Uncertainty in the company office rarely equals hiring.
- Loop Lady - Monday, Jan 28, 13 @ 11:41 am:
Do the Senate Dems need something to do besides pull the State out of the financial muck and solve the pension morass? Yeah, I didn’t think so…
- Yossarian Lives - Monday, Jan 28, 13 @ 11:44 am:
“A minimum wage doesn’t pull people out of poverty. Jobs do.”
The minimum wage is paid to people who have jobs. “Job creation” includes the creation of minimum wage jobs. We have to be careful what we wish for when we say we want jobs; what kind of jobs are we talking about? The kind of jobs that pay so little that the workers have to rely on all kinds of government benefits even though they’re employed? Businesses are in business to make a profit; they’re not going to start paying higher wages voluntarily just because we take steps to make the business climate “friendlier.” Look at the jobs available in “business-friendly” states that have low minimum wages, low corporate taxes, and few regulations. Too many of those are minimum wage jobs - or jobs given to contract employees from out of state.
- Demoralized - Monday, Jan 28, 13 @ 11:49 am:
==See, if I raise the price of labor (arbitrarily) without requiring or getting more productivity or a better employee,==
I’m sure you didn’t mean it this way, but that is essentially saying that workers should never get any kind of raise unless your stated conditions are met. No COLAs. No bonuses. No recognition of a job well done. Nada.
- chi - Monday, Jan 28, 13 @ 11:54 am:
I voted no because a minimum wage is a disincentive to unionization. In other words, if people want better pay, they should rely on themselves, not the government, and form/join a union.
- Deeda - Monday, Jan 28, 13 @ 12:07 pm:
I vote YES!!!! Thanks to Unions and Chicago Politicans taxes and prices of goods are going up, and at least you can raise the min wage. I understand you are all looking after your special interest, but please start looking out for “We The People”
- Anon - Monday, Jan 28, 13 @ 12:10 pm:
Yes, because to do otherwise results in a de facto yearly decrease in the minimum wage.
“Why then are we trying to cut the cost of living adjustments (COLA) to our pensions?”
Indexing to inflation and a yearly 3% COMPOUNDING increase that doesn’t even take the actual increase in cost of living into account are totally different things.
- Montrose - Monday, Jan 28, 13 @ 12:17 pm:
*I voted no because a minimum wage is a disincentive to unionization. In other words, if people want better pay, they should rely on themselves, not the government, and form/join a union.*
Wow. That is a pretty draconian way to encourage unionization. Should we peel back some OSHA requirements too to ensure we create conditions for greater union participation? Last I checked, unions we big backers of a decent minimum wage.
- illinifan - Monday, Jan 28, 13 @ 12:19 pm:
I voted yes. In today’s economy many of the jobs being created are minimum wage jobs. Individuals are having to often work more than one minimum wage job to pay their bills…The employers who pay these wages depend on government programs to help support their workers. I have seen staff from HR departments come to training programs on Food Stamps and All Kids so they can tell their employees about these benefits.
- Wumpus - Monday, Jan 28, 13 @ 12:33 pm:
No, because I am effectively getting a paycut when minimum wage is increased. I propose that they mandate wage increases for all at the same $ amount. $2.33 hourly increases for all!
- Steve Williams - Monday, Jan 28, 13 @ 12:37 pm:
“Thanks to Unions and Chicago Politicans taxes and prices of goods are going up…”
Hey Deeda - Here’s a lesson in reengineering, how about addressing the root cause not the symptom.
- USMCJanitor - Monday, Jan 28, 13 @ 12:42 pm:
Demoralized, you are COMPLETELY wrong about what I said.
I said if the price of a unit of labor is just raised, with no other change, the the product that unit of labor is creating or contributing to HAS to go up in price. You HEARD all the stuff about no raises, good job raise, etc.
COLA is something I DONT deal with. As a small business owner with only 32 employees we dont have “COLA”.
BUT I hire people and their wage is determined by what people will pay me for what they are doing (service) or what they are producing. So people get raises when their output or skills improve.
I mean if you hire a college graduate to do accounting he doesnt get paid the same as the guy that has been doing accounting for 3 years. Not because one has been there 3 years. That oversimplifies it. My 3 year guy has gotten faster and faster. He does things he did his first year here AND more. So He gets paid more.
My plumbers and other maintenance guys dont get paid what the new first year maintenance guy gets. Why they can do more, and do it faster.
The new guy I just hired is only worth about 10.50 (17/hour loaded cost to me) but in a year if he has worked and learn he will probably get bumped up a couple of bucks…
Dont REACT with emotion. Think about the wage and what it means. I love how you put a bunch of mean words in my mouth.
- Chi - Monday, Jan 28, 13 @ 12:46 pm:
“That is a pretty draconian way to encourage unionization”.
Yes, it is. And I wanted to encourage the discussion more than I wanted to support the notion. Unions are big backers of the minimum wage (and OSHA requirements, etc.). And rightly so. In large part, these improvements have been easier to attain than changes to labor law that would make it easier to unionize. At the same time, the more government regulation of labor markets, the more ammo for anti-union people to claim that unions aren’t “necessary” anymore (despite the fact that these governmental regulations wouldn’t have been implemented without unions).
To some extent though, increasing the minimum wage is akin to a non-union company giving its workers raises to deter them from joining a union.
- yinn - Monday, Jan 28, 13 @ 12:54 pm:
I voted yes. Minimum wage dollars tend to be spent and in this economy the boost in demand would be felt quickly.
- Responsa - Monday, Jan 28, 13 @ 12:57 pm:
Minimum wage jobs are important and play a key role in our overall economy. Minimum wage jobs provide needed income and provide a broad range of services. I say “no” to the QOTD for the same reason another commenter did, who stated:
==I voted no because automatic anything usually has unintended consequences==
Decisions on laws and regulations related to the economy and business for the most part need to be consciously thought through and then rethought as appropriate–not put on automatic–and then be forgotten.
- D.P. Gumby - Monday, Jan 28, 13 @ 12:58 pm:
Minimum wage should not only be indexed to inflation, but raised to the living wage. Economically, the minimum wage has been one of the greatest boosts toward the economic progress of workers. Now, with an increasing number of non-teenage workers in minimum wage jobs, the demand for a living wage is even greater.
- Plutocrat03 - Monday, Jan 28, 13 @ 1:03 pm:
With Illinois near the top if the range of national minimum wage, increases in minimum wages should not be at the top of the to do list.
Minimum wage is supposed to be offered to individuals with no work history and few marketable work skills. Once there is a track record and skills have been acquired, wages rise. One may have to go to a different job to get higher wages, but the training opportunity was the next rung on the ladder to success. Not every job can be used as a way to support a family. You are supposed to move on to better jobs as you become a more valuable worker.
- Foxfire - Monday, Jan 28, 13 @ 1:11 pm:
I think using the chained CPI is reasonable. It takes it out of the politicians hands and allows minimum wage to be indexed with the growth, or lack thereof, of the economy.
- Deeda - Monday, Jan 28, 13 @ 1:12 pm:
Steve Williams : Unions and Chicago Politicans are the sympton and root cause. Get rid of unions and major pay cuts to the politicans and finally cut the pensions.
- Boondocks - Monday, Jan 28, 13 @ 1:38 pm:
*John Galt* got it exactly right. Minimum wage jobs are entry level positions, they are not meant to support a family. An increase in the minimum wage results in fewer minimum wage jobs, entry level jobs that give valuable job experience to those workers who have little or no skills/experience.
- Cheryl44 - Monday, Jan 28, 13 @ 1:41 pm:
Maybe we need a two tiered minimum wage–one for teenagers who are working at McDonalds to pay for their car insurance, and another for the adult standing next to them, having to decide whether they want to eat that week or pay the rent.
/sarcasm
- dave - Monday, Jan 28, 13 @ 1:53 pm:
**Maybe we need a two tiered minimum wage–one for teenagers who are working at McDonalds to pay for their car insurance, and another for the adult standing next to them, having to decide whether they want to eat that week or pay the rent.**
Not sure why this is sarcastic… Illinois DOES have a two-tiered min wage. It is $.50/hour less for folks under 18.
- Cook County Commoner - Monday, Jan 28, 13 @ 1:56 pm:
No. Government mandated minimum wages levels are just another form of taxation. Government forces employers to pay the higher wage, and the employer must either eat the increased overhead thereby devaluing her capital risk and effort or pass the increased cost on to the consumer.
Neither result is good for encouraging entry level work.
The redistributionists should just be honest and directly take the money from taxpayers and directly hand it over to the class of earners they see fit to subsidize (and thereby encourage their votes). At least in this way it takes the load off of business in annually recalibrating overhead for another item as the government announces the CPI.
- Joe Bidenopoulous - Monday, Jan 28, 13 @ 2:05 pm:
I voted yes. Inflation doesn’t just affect what workers are paid - it reflects everything from cost of production to cost of goods sold. So a business owner might have to raise the price of something more than they want (they want to raise prices at a rate less than inflation so customer’s purchasing power actually increases and they buy more), but it only seems fair, frankly.
John Galt said:
=Secondly, every single surrounding state I believe just has a minimum wage that matches the federal rate. It puts Illinois at a competitive disadvantage.=
That’s a red herring. Almost all minimum wage jobs are in businesses that serve communities. Wal-mart. McDonald’s, the local boutique, etc. aren’t building new stores in Hammond to serve the needs of Monee. Minimum wage jobs are simply not the kind you can take across the border.
- Cheryl44 - Monday, Jan 28, 13 @ 2:09 pm:
I didn’t know that Dave, but wooooo, fifty cents.
- Yossarian Lives - Monday, Jan 28, 13 @ 2:30 pm:
I believe the current proposal would eliminate that 50 cent difference. On the theory, I’m guessing, that some teenagers’ paychecks are important factors in whether their families eat or pay the rent.
- The Cardinal - Monday, Jan 28, 13 @ 2:36 pm:
With all the Underemployment out there the Family wage earners need all they can get. Maybe they could provide real employment opportunities in this corrupt state so that adults would not be taking student and summer worker jobs so they can pay the rent.
- Liberty - Monday, Jan 28, 13 @ 2:37 pm:
There is a good argument that the minimum wage suppresses wages for entry level workers and low skills jobs by establishing an artificial baseline. Every time minimum wave goes up, these workers loose their raises. Pretty tough argument to fight politically against limo liberals who cry “everyone deserves a living wage” which minimum wage is not.
- Ruby - Monday, Jan 28, 13 @ 2:37 pm:
Only Washington($9.19), Oregon($8.95), and Vermont($8.60) have a higher minimum wage than Illinois. Connecticut and Washinhgton DC pay the same as Illinois($8.25). Nevada pays $8.25 and/or $7.25. There are many states that have a greater need to increase their minimum wage than Illinois.
http://www.ncsl.org/issues-research/labor/state-minimum-wage-chart.aspx
- Leroy - Monday, Jan 28, 13 @ 2:37 pm:
Absolutely!
If it raises the cost of something a couple of pennies, so be it.
Small price to pay so that a cut of the population doesn’t have to live in ditches.
- Bitterman - Monday, Jan 28, 13 @ 2:38 pm:
No it should not. Pultocrato3 said it very well. Min wage jobs are not meant for trained and educated workers. Many small businesses pay trained workers more than the min wage. If the min wage increases automatically year after year, all other pay scales must go up in order to keep the trained and therefore more valuable workers. Wage inflation occurs across the state and drives prices up for everyone, including the min wage worker who sees ultimately no benefit.
- Captain Illini - Monday, Jan 28, 13 @ 2:45 pm:
Artificially raising the minimum wage to satisfy an arbitrary price point diminishes the ability to utilize entry level work for its intended purpose of training. The adverse effect becomes a system where more qualified individuals are grouped with less qualified because of the pay rate mandated by law versus experience. I vote no.
- Small Town Liberal - Monday, Jan 28, 13 @ 2:53 pm:
- There is a good argument that the minimum wage suppresses wages for entry level workers and low skills jobs by establishing an artificial baseline. -
Yeah, I’m sure entry level wages would skyrocket if it weren’t for the minimum wage. That’s why business owners hate it, because they would pay everyone so much more without it.
There may be some good arguments out there against the minimum wage, that isn’t one of them.
- Geneva Guy - Monday, Jan 28, 13 @ 2:59 pm:
“Businesses are in business to make a profit; they’re not going to start paying higher wages voluntarily just because we take steps to make the business climate “friendlier.” Look at the jobs available in “business-friendly” states that have low minimum wages, low corporate taxes, and few regulations.”
Texas qualifies right? They have low minimum wages, corporate taxes and few regulations. Notwithstanding the fallacious arguments of zero-sum capitalism espoused by some, Texas has nearly tripled the percentage gains in median household income gains compared to Illinois in the last five years.
- zatoichi - Monday, Jan 28, 13 @ 3:18 pm:
Last time minimum wage was raised, prices at retailers who had to pay that increase simply went up to cover their costs. The Big Mac simply went up a $1. The social service groups who are providing group homes and other residential services (particularly the ones where people are moved from state facilities) are mostly staffed by people getting paid barely over minmimum wage ($9.00-$9.50 an hour). State going to increase the rates paid to providers so they pay those employees more?
- capncrunch - Monday, Jan 28, 13 @ 3:20 pm:
“…if people want better pay, they should rely on themselves, …. and form/join a union.
Isn’t that an oxymoron?
- Liberty - Monday, Jan 28, 13 @ 3:23 pm:
Small town liberal did your actually read my point?
- Nick Kruse - Monday, Jan 28, 13 @ 3:36 pm:
“Min wage jobs are not meant for trained and educated workers.”
Just because that’s not what its meant for, doesn’t mean that that is not what it has become in some cases. There are many adults with skills that are forced into jobs at or just above the minimum wage because of this economy.
- chi - Monday, Jan 28, 13 @ 3:51 pm:
–“…if people want better pay, they should rely on themselves, …. and form/join a union.
Isn’t that an oxymoron? –
Not sure if this is snark, but no, it is not an oxymoron. Collective action necessitates individual participation and initiative.
–diminishes the ability to utilize entry level work for its intended purpose of training–
The intended purpose of minimum wage work, as far as there is one, is cheap labor.
- mokenavince - Monday, Jan 28, 13 @ 4:16 pm:
I have employer people for over 40 years and always paid a living wage. $10.50 should be the bottom. We need a middle class,and we have to start some where. Look at what the the boys in Springfield make and they do nothing.Full bennys for a part time job and they get it without a gun and a mask.
- Wumpus - Monday, Jan 28, 13 @ 4:27 pm:
Why pay people more than the value of the work they do? No need to index it or increase it.
- Small Town Liberal - Monday, Jan 28, 13 @ 5:00 pm:
Liberty - Yep, multiple times. I believe it is incorrect.
Wumpus - You tell me, the folks that wrecked our economy make more than all of us combined, was that work really valuable?
Something tells me this whole issue is a little more complicated than you think.
- Just The Way It Is One - Monday, Jan 28, 13 @ 7:18 pm:
The Pension Crisis needs to be dealt with above all else by the Legislature. We are BLEEDING MILLION$ every day! Then they should squabble all they want about minimum wage increases vs. indexing. There’s an obvious need down there in Springfield to get Priorities straight!
- Fred's Mustache - Monday, Jan 28, 13 @ 8:14 pm:
You know, its issues like this that really get my blood boiling. I am more sympathetic to indexing the minimum wage, but at the end of the day, neither response is the answer. We need a broad-based federal policy that addresses the creation of middle to lower level waged jobs.
What gets me is that many of those that are against raising the minimum wage are also the same ones that criticize government spending on social programs for the working poor. They are the same people who classify low-wage workers as “lazy” or unwilling to work. “Everyone wants handouts.” Well let me pose this question to you… WHERE ARE ALL THE JOBS!?!? Where are all the jobs that pay wages that people can make a living off of? You may argue its too much regulation or two high of a minimum wage have made us uncompetitive. THAT’S HOGWASH.
The fact of the matter is, we are now competing with China, Mexico, or some other nation that has little to NO REGULATION when it comes to working conditions, environmental standards, or anything that matter. Heck, even China is becoming uncompetitive because you can make products cheaper elsewhere!
My point is, no matter what a state’s policy on the minimum wage, no state can be competitive in light of the framework that has been allowed to take place. The most shocking thing to me is that the answer has always been to reduce progress in our own country rather than move for progress in the developing world. Unless you address these issues, the race to the bottom will undoubtedly escalate in the near future.
I probably overgeneralized a bit in my analysis,and I understand that there are other things that can be done to encourage small business growth (broadening the corporate income tax base for instance to lower the overall burden on small businesses). But you know, I’m not going to sit here and figure out how I can make it more difficult for the working poor.
- Liandro - Monday, Jan 28, 13 @ 11:19 pm:
No, because it will cause even less thought put into increasing expenses that others occur. I’ve posted on minimum wage several times here, and how it hurts living wage employees in areas not named Chicago==among other problems.