Small businesses wary of effects of $15 minimum wage

By: Illinois News Network
Posted 5/22/17

Changing Illinois’ minimum wage to as much as $15 an hour wouldn’t just impact entry level wage earners, it would force a different wage ratio for experienced staff and lead to price increases for consumers as well, a Springfield-based small business owne

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Small businesses wary of effects of $15 minimum wage

Posted

SPRINGFIELD — Changing Illinois’ minimum wage to as much as $15 an hour wouldn’t just impact entry level wage earners, it would force a different wage ratio for experienced staff and lead to price increases for consumers as well, a Springfield-based small business owner said.
The state’s current minimum wage is $8.25 an hour. Different proposals in the Illinois General Assembly could take that to as high as $15 an hour.
Springfield’s Sunrise Cafe owner Danny Johnston said that he already pays many employees above the minimum wage, and if it is increased.
“What, do I have to give [more experienced workers] $20 an hour, the ones that have been with me 15, 20 years – $25 an hour? You gonna come eat a $12 hamburger?” he said.
Currently, a hamburger and fries special at Sunrise is about $7.

Johnston said he doesn’t see the incentive for increasing the minimum wage, which will lead to many jobs going to older and more experienced people by squeezing out the younger, less experienced population.
“Granted, it’s tough out there right now and jobs are tough to find, but there are going to be less people doing more work,” Johnston said. “I’m going to expect more out of you.”
It also would be difficult for businesses in border communities to compete, National Federation of Independent Business Illinois State Director Mark Grant said.
“Those that close may, in fact, just pick up and move across the river. There’s a good chance of that,” Grant said. “So Illinois loses again.”
A new NFIB report says raising the state’s minimum wage to $15 an hour by 2022 would lead to 93,000 fewer jobs in Illinois, decrease output over 10 years by $56 billion and hit small businesses the hardest.
Grant said the minimum wage is not supposed to be a “living wage” as proponents of an increase characterize it. He said a small percentage of Illinois workers are paid the minimum wage but the impacts of an increase would be felt across the wage spectrum.
“It doesn’t matter if the business is already paying ten bucks and hour, you’re going to have to raise your wages because the entry levels are all going to be pushing that wage up,” Grant said. “So you have in fact government wage inflation and that kills the prices for everything. Consumers pay for it in the end.”
Simon Worsfold from time tracking software company TSheets said a recent poll found nearly half oppose an increase to $15 and two-thirds were confident that proposal would fail, but “there was quite a significant amount of support for proposals to provide tax credits for small businesses to help them with the cost of the proposals were they to succeed.” Visit https://www.tsheets.com/minimum-wage#illinois to learn more.
A statewide advisory ballot referendum in 2014 found nearly 64 percent support for increasing the minimum wage to $10.