In the Chicago vs. Illinois Minimum Wage Fight, Workers Lose – Next City
The Equity Factor

In the Chicago vs. Illinois Minimum Wage Fight, Workers Lose

Workers rally for a $15-an-hour minimum wage outside a McDonald’s on Chicago’s South Side in September. (AP Photo/M. Spencer Green)

All year on Next City, we’ve been following the rising minimum wage across U.S. cities. From a victory for L.A.’s hotel workers to Seattle’s groundbreaking increase to $15 an hour, municipalities are making headway in the effort to bring workers out of poverty and reduce income inequality.

In the past few weeks, the efforts to raise the minimum wage in the state of Illinois have taken a divisive turn, as business interests have pitted workers in Chicago against those in Illinois’ smaller towns and suburbs.

In mid-November — after 64 percent of voters agreed that the baseline should be lifted in an election day referendum — state Democrats advanced legislation that would raise the hourly minimum wage in the state from $8.25 to $11 by 2017.

Meanwhile in Chicago, Mayor Rahm Emanuel swayed the City Council in early December to raise the city’s minimum wage to $13 an hour by 2019. The state legislature, backed by business interests like the Illinois Retail Merchants Association, is pushing back against the city, threatening to take away their home-rule authority on the issue. They claim that the city’s proposed wage increase could put Chicago at a competitive disadvantage and drive businesses out of state.

“There’s no problem raising the state to $10 or $11 and then Chicago raising its own to $13 or $15, as we had originally pushed for,” says Aileen Kelleher of the coalition Raise Illinois. “There’s really no conflict at all, but it was a manufactured conflict by legislators when City Council and the Mayor passed the $13 ordinance. [House] Speaker Madigan got upset and refused to hold a vote on the minimum wage at all. As of right now, 64 percent of Illinois voters want a minimum wage [increase] but legislators are woefully preventing that from happening based on a tight dispute between the city and the state.”

Other Illinois cities are caught in the crosshairs. The cost of living in Chicago has been used to justify the higher minimum wage rate (Kelleher says that housing is at least 30 percent more expensive than in other areas of Illinois), but urban poverty remains a problem outside the city. In Peoria, the child poverty rate jumped 7 percent to 27 percent from 2006 to 2011. The squabbles over Chicago’s hike take away from the momentum that had been building in that city. Peoria advocates were hoping that the state legislation would pass before Republican Gov.-elect Bruce Rauner takes office on January 12th.

“I would hope that the legislators in Springfield will take advantage of this veto session and do something that the people of the state of Illinois have voted overwhelmingly to support,” said Peoria NAACP President Don Jackson at a press conference.

Kelleher mentions that studies on minimum wage increases overwhelmingly show that businesses do not move out of state when wages are increased. It’s true. A comprehensive 2013 study showed that differing minimum wages had zero employment impact along contiguous counties in different states.

“Let’s give them the benefit of the doubt and say that businesses would move out of Chicago,” says Kelleher. “How does that have any bearing on whether the state raises the minimum wage? … This state is just so biased towards big business and giving tax breaks to big corporations while Illinois has one of the biggest income inequality levels in the country.”

The state of Illinois ranks 9th in the top-to-bottom measure of income inequality. This means that the top 1 percent of households made 24.5 times the average income of the bottom 99 percent in 2011.

For now, the issue has been stalled. “[The timeline] changes with each political move made by the legislature, so as of right now I can’t tell you when we expect this to pass,” says Kelleher. “What we are going to do is what we’ve always done, which is continuing to organize and mobilize ordinary people in Illinois and Chicago to step up and increase the pressure around elected officials, because that’s the only way we’re able to get things done for the people of Illinois.”

The Equity Factor is made possible with the support of the Surdna Foundation.

Alexis Stephens was Next City’s 2014-2015 equitable cities fellow. She’s written about housing, pop culture, global music subcultures, and more for publications like Shelterforce, Rolling Stone, SPIN, and MTV Iggy. She has a B.A. in urban studies from Barnard College and an M.S. in historic preservation from the University of Pennsylvania.

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Tags: chicagoincome inequalityminimum wage