Governor vetos raising Illinois’ minimum wage

Gov. Bruce Rauner on Friday vetoed Democrat-approved legislation that eventually would increase Illinois’ minimum wage to $15 an hour.

rauner bruceThe legislation was opposed by business groups across the state who said it would lead to layoffs and fewer work hours for those who can afford such cuts the least.

 “Helping low-income families and individuals get out of poverty is a top priority, and I share the passion of many members of the legislature for improving the well-being of those struggling to make ends meet,” Rauner said in his veto message. “However, mainstream economic theory and mainstream economic evidence strongly suggest that an increase in the minimum wage of this magnitude will hurt the very individuals it seeks to help.”

Illinois’ minimum wage currently is $8.25 an hour. Under the legislation passed in May on party line votes, the minimum wage would rise to $9 an hour next year and include several step increases until it hits $15 an hour in 2015. An override of Rauner’s veto requires two-thirds majority votes in both chambers. Neither the House nor the Senate would have enough votes for a successful override unless a handful of lawmakers who opposed the measure initially change their votes.

In his veto message, Rauner cited a recent study by the University of Washington that concluded an increase of Seattle’s minimum wage to $13 an hour led to significant job cuts and hour reductions for workers.

“The most thorough research to date, published earlier this year by researchers at the University of Washington, found that for every 10 percent increase in the hourly earnings of low-wage workers, there was a 30 percent reduction in employers providing those jobs,” Rauner said. “This research implies that Senate Bill 81 will result in a net reduction of earnings for low-wage Illinoisans in excess of $1,500 per year.”

Democrats criticized Rauner’s veto.

“Governor Rauner’s veto doubles down on his stance against some of our most vulnerable communities,” Rep. Kimberly Lightford, D-Maywood, the sponsor of the increase, said in a statement. “There is no reason why a single parent working full-time should qualify for food stamps and Medicaid. Our workers deserve financial independence and the empowerment that comes from being able to provide for a family.”

Others applauded the governor’s action.

“Illinois retailers applaud Governor Rauner for standing up for Main Street businesses by vetoing SB 81, legislation that would have forced employers to reduce hours and eliminate jobs,” a statement from the Illinois Retail Merchants Association says. “The state’s minimum wage is already the highest in the Midwest and if this measure had become law it would have put Illinois retailers at a competitive disadvantage compared to neighboring states.”

Downstate businesses, where the cost of living is substantially lower than in Chicago, were worried that such an increase would devastate southern Illinois.
“You’d have to turn around, and to stay in budget, you’re going to have to lay people off,” George Sheffer, owner Murdale Tru-Value in Carbondale, told Illinois News Network earlier this summer. “The median wage in many downstate Illinois communities is less than $15 an hour. In Carbondale, it’s less than $14.”

Included in the bill is a tax rebate for businesses with 50 or fewer employees, but that break ends in 2025. 
A report released earlier this summer says a statewide pay hike might cost an already lagging state what little jobs they planned to create. 

“There will be 382,200 fewer jobs than there would be otherwise without a minimum wage increase,” Ben Gitis, director of Labor Market Policy with the American Action Forum, said last month. “That wipes out, essentially, all projected job growth Illinois is planned to have over the next decade.”

Gitis said the tax rebate offered in the bill also doesn’t go far enough to protect small businesses from the economic hit to their bottom lines. 

Story by the Illinois News Network. Visit ILNews.org

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