Today the House voted 69-46 to raise the minimum wage to $15 per hour within six years. Below is a statement from State Representative Lindsay Parkhurst (R-Kankakee):
“Illinois is unfriendly to job creators. Illinois’ excessive workers’ compensation insurance, high taxes, and highest minimum wage in the region, damages and degrades our business climate.
I am disappointed Democrats continue the assault on Illinois’ small businesses by passing the minimum wage hike with no negotiation and no input from the Republicans. They simply passed the bill from the Senate without entertaining Republican concerns or suggestions for amendments. This incremental wage increase results in an 82% increase in labor costs for businesses. Inevitably, stores will close, jobs will be lost, prices will increase, and those who Democrats intend to help will only be hurt. History supports this result as this happened in Illinois when it increased the minimum wage in 2010 from $7.25 per hour to $8.25 per hour.
This law affects the State Budget because it significantly increases costs to the state government. Governor Pritzker’s administration estimates the cost by 2025 will be more than a billion dollars to state government. This conservative estimate does not cover any additional pension costs the state pension systems will incur, the matching federal employer tax, or the costs to our state universities, colleges, local school districts, municipalities, park districts, and other local governments.
Democrats argue the tax credit available to businesses helps offset the costs incurred by businesses, but any business who pays more than minimum wage is not eligible. Employers with more than fifty employees are not eligible. The local movie theater, grocery store, or restaurant is not eligible under this model.
The reality is the majority of those earning minimum wage are individuals just joining the workforce. Increasing the minimum wage will only serve as a barrier to success in the future by limiting job experience because the jobs are lost or significantly reduced. This shortsighted measure will drive businesses and commerce to our neighboring states where prices are cheaper. It will raise property taxes by increasing labor costs for our local governments as an unfunded mandate.
Illinois needs real reforms to encourage business growth and good wages. This measure does the opposite and is why I voted no on SB1.