Minimum wage proposal raises hope for workers, fear for employers

Published: Saturday, Feb. 9, 2013 5:30 a.m. CDT • Updated: Saturday, Feb. 9, 2013 7:37 a.m. CDT

Should Illinois’ governor get his way, workers at the bottom of the wage scale soon could get a state-mandated pay raise.

But should state lawmakers increase the minimum wage, businesses and other employers of those earning the wages say it could create problems for employers and consumers.

In his 2013 State of the State address Wednesday, Gov. Pat Quinn told lawmakers in Springfield that he intends to push for legislation to boost Illinois’ minimum wage from $8.25 to $10 an hour.

Quinn’s proposal is similar to a proposal introduced in the state Senate in 2011 that would have raised the minimum wage to just over $10 an hour by 2014.

Quinn and others who support increasing the minimum wage say it’s needed to help families living at or beneath the poverty line survive.

Kimberly Drew, a policy associate with the Chicago-based Heartland Alliance, said the increase would largely go to those over the age of 20 working full-time jobs.

She said the increase would help families and the state’s economy.

She pointed to a report issued in 2012 by the Economic Policy Institute that indicates increasing the minimum wage would act as an economic stimulus, putting more money in the hands of consumers likely to spend it immediately.

The report claims that increasing Illinois’ minimum wage to more than $10 a hour would help the wage keep pace with inflation and provide more than $3 billion a year to low-income families.

Businesses and their lobby groups take a different view.

The Illinois Retail Merchants Association, for instance, called the proposal “job-killing.” IRMA president David Vite said boosting the minimum wage would “only hurt those looking for a job and those who employ them in this challenging economy.”

That view was shared by employers in the Tri-Cities.

Craig Frank, owner of job recruiting firm Frank’s Employment in St. Charles, noted that Illinois already has the fourth-highest minimum wage in the country.

He said raising the wage at this time would only deal another blow to the state’s relationship with business owners, who he said are fearful of Springfield.

“I think it’s a fallacy that this is going to help anyone,” Frank said.

Other business owners said they would have to to raise prices. Pete Spentzos, owner of Apple Villa Pancake House in Batavia, said he saw “no way to maneuver” his business or finances to just absorb any such increase.

He said he’d have “no other way” to keep his business operating than to pass the additional cost associated with paying his 40 workers on to his customers.

And at the St. Charles Park District, business manager Karen Schindel said the district likely would need to consider increasing user fees to absorb the cost of paying the increased wages to many of its 300 to 400 seasonal employees, including lifeguards, camp counselors and others who earn at or near the minimum wage.

“It would be very difficult for us,” Schindel said.

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Jan Schlictmann at a Geneva law firm.

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