Illinois will not become the next state to implement a $15 minimum wage. Low-wage workers should rejoice.
Republican Governor Bruce Rauner vetoed a bill that would have phased in a higher wage for the lowest-paid workers from the current $8.25-an-hour level to $9 in January and $15 by 2022.
Because the bill passed narrowly in each chamber of the legislature, it’s unlikely that they will be able to muster up the votes for a veto override.
Chicago’s minimum wage stands higher than the state at $11 an hour and is on its way up to $13 per hour by 2019. Cook County, the second most populous county in the country and home of Chicago, will also be raising their minimum wages although many suburbs have reportedly opted out.
The governor explains that this is a win for many low-wage workers, who may experience smaller paychecks from fewer hours of work, fewer opportunities to get hired, and job losses:
"Mainstream economic theory and mainstream economic evidence strongly suggest that an increase in the minimum wage of this magnitude will hurt the very individuals it seeks to help," Rauner said.
“The most thorough research to date, published earlier this year by researchers at the University of Washington, found that for every 10 percent increase in the hourly earnings of low-wage workers, there was a 30 percent reduction in employers providing those jobs," Rauner said.
Unions are predictably irate and over-the-top in their criticism of the governor as the Chicago Tribune reports.
However, this veto is an important blockade against a progressive tidal wave sweeping the country. The Fight for $15 Campaign has gained a footing in the coasts and urban areas, but hasn’t been able to gain a foothold in the Midwest outside of urban areas.
The challenge for minimum wage supporters is the growing body of evidence (including anecdotal) that confirms economic thought on the subject. When you raise wages to the arbitrary level of $15 an hour, you raise costs on businesses and employers will respond. They pass higher costs onto customers and workers.
As the University of Washington found earlier this year, average low-wage workers earned skinnier paychecks because employers reduced hours, avoided hiring, or laid off workers following Seattle’s minimum wage increase. This contradicts other research that suggests minimum wage hikes will have little or no impact on jobs.
As we often contend, what good is a higher wage, if you can’t find someone willing to hire you? If we want to grow paychecks, let's cut taxes and grow opportunities so low-wage workers can climb the mobility ladder.