* Sun-Times…
The Illinois Senate on Thursday passed an increase in the state’s minimum wage to $11 by 2019, one day after Gov. Bruce Rauner used his State of the State speech to pitch a lower, more gradual increase.
The bill by Sen. Kimberly Lightford, D-Maywood, passed 35-18 and now moves to the House. It increases the minimum wage from $8.25 to $9 by July 1. The wage would then increase by 50 cents every year until it reaches the $11 ceiling. It also includes a tax credit for businesses with fewer than 50 employees. .
* The Tribune claimed the vote could be merely a symbolic gesture…
Senate Republicans criticized the move, saying it was a slight to a governor who indicated he wanted to work with Democrats to raise the wage during his tenure. Rauner says any increase in the wage should be packaged with business-friendly measures such as an overhaul in the workers’ compensation system and limits to lawsuits.
“I would just ask that you take the governor on his word that this is something he is going to deal with, and then we can continue the conversation,” said Sen. Kyle McCarter, R-Lebanon.
Support for an increase remains questionable in the House, where a similar measure stalled last fall. Speaker Michael Madigan, D-Chicago, said he supports the effort and is working to gather votes.
* Some in the business community, however, are pointing to a San Francisco bookstore whose owner supported the living wage concept that is now going out of business. From a letter to its customers…
In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in principal and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st. The cafe will continue to operate until at least the end of this year.
Many businesses can make adjustments to allow for increased wages. The cafe side of Borderlands, for example, should have no difficulty at all. Viability is simply a matter of increasing prices. And, since all the other cafes in the city will be under the same pressure, all the prices will float upwards. But books are a special case because the price is set by the publisher and printed on the book. Furthermore, for years part of the challenge for brick-and-mortar bookstores is that companies like Amazon.com have made it difficult to get people to pay retail prices. So it is inconceivable to adjust our prices upwards to cover increased wages.
The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.
$11 an hour ain’t $15 an hour, but you get the drift.
- Not Rich - Friday, Feb 6, 15 @ 12:11 pm:
tough issue..particularly when the proponents will not negotiate on a teen/training wage..I guess the Senate sponsor missed the story last week about minority teen unemployment in Chicago hovering at 90%..
- PublicServant - Friday, Feb 6, 15 @ 12:20 pm:
I’m glad the minimum wage bill advanced out of the senate. I wish it were higher. I hope Mike Madigan and the House can also pass the bill.
As for the example cited by business groups that are against a minimum wage increase, the owner himself says bookstores are a special case that due to their product and external competition, they don’t see a viable way of continuing to turn a profit.
To allow a business to retain its profit margin based on paying its workers so little as to cause them to rely on the taxpayers for support of their food and shelter needs, should not be in business in the first place.
- 47th Ward - Friday, Feb 6, 15 @ 12:20 pm:
Somebody tell Governor Rauner that there are two numbers that matter in Springfield: 60 and 30. His minimum wage insult just got handed back to him. I can’t wait for the veto and subsequent over-ride for the newby Governor to understand what “co-equal branches of government” means.
Well played President Cullerton.
- logic not emotion - Friday, Feb 6, 15 @ 12:21 pm:
Agree that it is a tough issue. Immediately before pulling up Capitolfax, a coworker and I were talking about minimum wage, employee wages and how our wage scale has become greatly compressed due to lack of increases.
One impact area that hasn’t been discussed as much as I believe it merits is the social service agencies that receive state grants to conduct programs. Many, probably most, of those grants have been significantly reduced over the years while requirements have increased. Many of the employees working through those programs make very close to the present minimum wage. They deserve to earn more; but the money isn’t there to provide it. Therefore, an increase in the minimum wage without a corresponding increase in the state grant will result in either less staff or the social service agency discontinuing the service entirely.
- Jerome Horwitz - Friday, Feb 6, 15 @ 12:27 pm:
Senate Bill 12 would recalculate rates of reimbursement to vendors to account for increases in the minimum wage. The bill is placed on calendar order of second reading February 17th.
- Oswego Willy - Friday, Feb 6, 15 @ 12:34 pm:
===Somebody tell Governor Rauner that there are two numbers that matter in Springfield: 60 and 30.===
Spot on. It sounds remedial, but it’s like Rauner thinks getting a poll to say something will make that absolute fact go away.
60 & 30.
Those sheparding the Rauner legislstive agenda better remind that Crew those are the only numbers that matter now.
- Joe M - Friday, Feb 6, 15 @ 12:48 pm:
Back in November the voters of Illinois voted in an advisory referendum by over a 2-1 margin to raise the minimum wage to $10 by January 1, 2015.
Madigan sponsored the legislation for the advisory referendum. Rauner seems to like voter referendums. The voters have spoken. What are we waiting for?
- Anon. - Friday, Feb 6, 15 @ 1:03 pm:
==As for the example cited by business groups that are against a minimum wage increase, the owner himself says bookstores are a special case that due to their product and external competition, they don’t see a viable way of continuing to turn a profit.–
The trouble is that raising prices is not the only means. Reducing customer services to allow reduced employee headcount works, too. As Walter Williams pointed out a couple of months ago, many unskilled workers can be replaced by customer self-service. Anyone remember life before self-service gas stations? Also, increased prices reduce the value of the raised wage, so the net benefit to the minimum wage worker is less than it seems for the ones who keep their jobs. Raised prices also mean that the “new business” that results from putting more money into the hands of people who spend rather than save is to some extent just higher prices paid for the same level of business. The list goes on. The issue is a lot messier than most proponents or opponents realize.
- zatoichi - Friday, Feb 6, 15 @ 1:13 pm:
“To allow a business to retain its profit margin based on paying its workers so little as to cause them to rely on the taxpayers for support of their food and shelter needs, should not be in business in the first place.”
So are you talking about the Walmarts and Amazons of the world (assuming you never shop there), the rates Illinois pays to residential and community based service providers, staff in your local nursing homes/convenience store/gas station/retail store/small manufacturer/janitorial service and every company who just cut their part-time people to 28.5 hours for ACA reasons? If not, who are you talking about?
- Harry - Friday, Feb 6, 15 @ 1:23 pm:
So we raise the rates paid to social service providers–the Sate is busted, who comes up with the cash to make it good? Or, we have fewer social service providers…
Anon at 1:03pm has it good–this is a very complicated issue and almost no one in the public debate is even scratching the surface of all the ramifications.
- Wordslinger - Friday, Feb 6, 15 @ 1:40 pm:
Are you kidding me? A bookstore going out of business is an argument against a minimum wage bump? Is that a gag?
Lot of bookstores springing up around the country? Is Amazon just a river in South America?
For crying out loud, get some game.
- logic not emotion - Friday, Feb 6, 15 @ 1:52 pm:
Jerome: Thanks for that insight. Does that include grantees or just vendors? Concern still valid if does not also include grantees. Logic
- logic not emotion - Friday, Feb 6, 15 @ 2:00 pm:
Anon 1:03 is right. It is a VERY complicated issue. At its essence is the question of is it better to have fewer higher paying jobs or more lower paying ones; but it isn’t really even near that simple in reality.
- Matt Belcher - Friday, Feb 6, 15 @ 2:02 pm:
==Are you kidding me? A bookstore going out of business is an argument against a minimum wage bump? Is that a gag?
Lot of bookstores springing up around the country? Is Amazon just a river in South America?
For crying out loud, get some game.==
This.
- Norseman - Friday, Feb 6, 15 @ 2:02 pm:
Things are still early. Rauner put his proposal on the table during the SOTS. The Senate upped the ante with theirs. Negotiations will continue in the backroom as they decide what ornaments to put on this Christmas Tree.
- A guy - Friday, Feb 6, 15 @ 2:04 pm:
A lot of folks earning minimum wage are not trying to raise and sustain families on it (obviously, you can’t) I would ‘guess’ the people who worked in this bookstore were picking up some dough and doing something they loved. That’s just one example, but small businesses will be affected by this. Not everyone can raise their prices to account for this because the consumers will vote the way they most often do; they’ll buy somewhere else. At least Amazon is paying sales tax now.
We’ll see where this goes, but small business people are very active and will let their Reps know how they feel. Neither $11, nor $15 is a wage that gets anyone to an income level to rely on for sustenance. The whole notion of minimum wage being an entry level wage has been turned on it’s head.
- Wordslinger - Friday, Feb 6, 15 @ 2:43 pm:
Guy, you’re way wrong. Google the Pew Center study on minimum wage.
We'’re not talking Archie and Jughead here. Half the people earning minimum are white women over the age of 25.
Minimum wage employers are subsidized heavily with SNAP, Medicaid, EITC, Section 8, etc.
For crying out loud, are we Yankees or not? A billionaire bust-out scammer who thinks two bits a year is a bump, the middle class is a burden, and unions are for commies?
If I wanted to live in Mississippi, I’d move there. But I ain’t going anywhere, so pack a lunch, it’s going to be an all-day job.
Respect those that came before you, and leave it better than you found it
- A guy - Friday, Feb 6, 15 @ 3:01 pm:
Slinger, I found minimum wage at $1.20/hr. There are plenty of businesses that rely on entry level people to do labor at a low cost. Students and retirees filled the bill. Over time, many immigrants who were learning the language and new skills would be part of this work force. It’s really not meant to be permanent work for anyone.
You’ll still have SNAP, Medicaid, EITC, Section 8 AND a higher hourly rate. A lot of those smaller business owners aren’t going to absorb an increase or move. They’ll close. A few jobs lost at each place and a service provider or goods provider lost in a neighborhood– probably the ones who have few options already.
Minimum wage is not something to aspire to. It’s someplace to start, pick up skills and move on to make more doing something more skilled. We could argue about the economics of this all day long and not ever agree. Small business, which is most business is handicapped in a lot of ways in this state. This is just another reason to close…or worse, never open.
- Precinct Captain - Friday, Feb 6, 15 @ 3:03 pm:
==Neither $11, nor $15 is a wage that gets anyone to an income level to rely on for sustenance.==
Actually if there are two working adults, $15 is a living wage and the second adult doesn’t have to work full time 52 weeks to meet the living median income standard.
- Jerome Horwitz - Friday, Feb 6, 15 @ 3:08 pm:
@logic According to the Illinois General Assembly home page, Senate Bill 12 provides that Departments (DHS, DCFS, etc.) must fully recalculate rate and reimbursement methodologies. So, it looks like not only rates but also reimbursement methodologies are adjusted if a minimum wage is passed.
- A guy - Friday, Feb 6, 15 @ 3:32 pm:
P Cap’n, the demo you describe isn’t the one on the poster.
- logic not emotion - Friday, Feb 6, 15 @ 3:35 pm:
Jerome: I’ve skimmed that. It looks like that includes many of the same ones where state is supposed to pay interest if late payments. Seems like grantees were excluded from those and I fear they may be from this. Thanks for the info. I hope you’re right. Logic
- zatoichi - Friday, Feb 6, 15 @ 4:32 pm:
Regarding SB12, I was just on a conference call where this came up. Of three departments most effected by SB12, only one has enough staff to figure the cost. Get rid of more state workers, that’s the ticket.