Upon approval from Governor Blagojevich, minimum wage workers in Illinois will begin to see an increase in their hourly pay rate. This sounds like great news for those employees, but some experts of economics are hesitant. University of Illinois Chicago Economics Professor Robert Kaestner says the number of jobs will decrease.

“In Illinois it’s going to raise the wage one dollar from 6.50 to 7.50 an hour. That’s about a fifteen percent raise, that will be associated with approximately a three percent decrease in employment of say teens who make the minimum wage. That’s about 10,000 jobs in Illinois.”

Kaestner believes that earned income tax credit would have been a much better alternative to the minimum wage increase. Associate Professor of Economics at the U of I Elizabeth Powers agrees.

“The earned income tax credit is a refundable tax credit to earners in low income households. It targets the households by their adjusted gross income, so it takes into account tax credit for multiple earners in the household.”

According to both professors, rather than concentrating the costs on employers, the earned income tax credit system would spread the cost to everyone in the federal tax system. Illinois is expected to put the final approval on a minimum wage increase, despite the alternative. The increase is expected to take effect June 1, 2007.