Middle Class Renewal Project examines state minimum wage
October 30, 2018
The School of Labor and Employment Relations is investigating the working conditions of workers in today’s economy to develop policies that will reduce poverty and discrimination, as a part of the Project for Middle Class Renewal.
Robert Anthony Bruno, professor in Labor and Employment Relations, said the study assesses the economic impacts of three different proposals to raise the state’s current minimum wage, which has been set at $8.25 an hour since 2010. These proposals include increasing wages to $10 an hour by 2019, to $13 an hour by 2022 and to $15 an hour by 2024, he said.
The project focuses on different case studies every year, such as practices impacting labor and workplace issues. One study by Doug Finke from GateHouse Media Illinois investigated how Illinois would benefit from an increase in minimum wage.
“The study enables policymakers to have a much better idea of what the benefits and costs of raising the minimum wage would have for the people of Illinois,” Bruno said. “Elected leaders can make more informed judgments about policy choices that will improve the lives of thousands of workers and citizens of Illinois.”
The study was collaboratively conducted by the Illinois Economic Policy Institute and the Project for Middle Class Renewal. Increasing the state’s minimum wage has many benefits, such as reducing income disparities, boosting worker income and increasing consumer spending.
According to the study, Illinois’ minimum wage should be $10 an hour now due to the rising inflation. Increasing the wage to $10 an hour would have impact on 353,000 workers, especially women, bring $5 billion economy growth a year and bring 35,000 people out of poverty. Raising the minimum wage to $15 per hour would affect 1.4 million low-income workers and bring $19 billion economic activities.
“In Illinois, a full-time worker earning today’s state minimum wage rate brings home just $17,160 in annual income,” Bruno said. “This is $3,620 below the federal poverty line for a family of three and $7,940 below the federal poverty line for a family of four. One in four employed workers are earning incomes below the federal poverty rate for a family of three.”
Bruno said the project can provide some important insights into the direction the state takes.
However, issues about raising the minimum wage arise. Policy director of ILEPI, Frank Manzo, said there is no unemployment increase in Chicago, and Bruno reiterates this.
“Business critics shave always claimed that workers would suffer if pay was increased,” Bruno said. “But the wealth of studies has not confirmed that on balance, a minimum wage boost has priced workers out of employment.”
Todd Maisch, Illinois Chamber of Commerce president, said the study is not convincing, as the nonprofit organization is not neutral. It is difficult to count the real loss of employment when there is an artificial floor under wage rates.
Maisch said last year, lawmakers approved a bill to gradually raise the state’s minimum wage to $15 an hour, but Gov. Bruce Rauner vetoed the bill and lawmakers did not override the veto.
“Raising the minimum wage is one way that Illinois state government can improve the lives of thousands of its citizens, lower poverty rates, increase financial independence and strengthen the economy,” Bruno said. “It is a way to make sure that work pays and provides a ladder into the middle class.”