The City Council on Tuesday overwhelmingly approved raising Chicago’s minimum wage to $13 an hour by mid-2019 as the fate of a state plan to raise the statewide pay floor remains uncertain.
The 44-5 vote on the city minimum wage came as Mayor Rahm Emanuel and most aldermen gear up campaigns for re-election or higher office in the Feb. 24 election. Ald.Bob Fioretti, 2nd, and Cook County Commissioner Jesus “Chuy” Garcia are challenging Emanuel from the left of the political spectrum and aldermanic candidates are mounting similarly styled challenges in some wards.
Aldermen and the mayor have framed the minimum wage increase as a way to lift thousands of families, including many led by single mothers, out of poverty.
“Working Chicagoans deserve a raise,” Ald. Will Burns, 4th, who has led the council charge to boost the minimum wage, said before the vote. “They waited for action in Springfield. The waited for action in Washington, and while they waited, their wages remained stagnant while the cost of living continues to increase.”
“We look in our city, and we see the growing chasm between those who have and those who don’t,” Burns added. “Raising the minimum wage is not the solution to all of these problems, but it is a key step toward bringing greater equality, bringing greater justice and bringing greater democracy to our city.”
Chicago’s minimum-wage workers will see their first increase next July, when the rate increase to $10 an hour from the current statewide hourly rate of $8.25.
It then will increase by 50 cents in July 2016 and another 50 cents in July 2017. The minimum wage would go up $1 in July 2018 and $1 in July 2019 to reach $13 an hour.
After that, annual increases would be pegged to the local consumer price index, with a limit of 2.5 percent, if the unemployment rate stays below 8.5 percent.
Ald. Brendan Reilly, 42nd, and Ald. Tom Tunney, 44th, tried to use a parliamentary maneuver to delay the council vote with the mayor trying to move before state lawmakers vote on the issue. But the aldermen were outmaneuvered by supporters of the measure.
Reilly and Tunney were joined in voting against the measure by Ald. Matthew O’Shea, 19th; Ald. Mary O’Connor, 41st; and Ald. Michele Smith, 43rd. Ald. JoAnn Thompson, 16th, was absent.
All five aldermen who voted against the wage increase expressed fears that a higher minimum wage in Chicago could harm the profits of city businesses, lower city employment and put a dent in city sales and property tax revenue.
“If we raise the minimum wage in a responsible way, we could very well see an improved quality of life for many residents and a stronger local economy,” said O’Connor, who owns a deli and catering business. “If we do it wrong, if we decide to arbitrarily raise the wage to a level that hurts our businesses and stops the kind of growth that this city desperately needs, then we will be driving up costs on just about everything that you buy at our small businesses and, worse, bringing job creation to a screeching halt, hurting those individuals an increase in the minimum wage was meant to help.”
Noting that her Northwest Side ward borders several suburbs, O’Connor added, “Businesses in wards like mine will look to relocate elsewhere, like one block down the street in many instances. That means more vacant storefronts, less revenue for the city and more than likely a permanent freeze on our expansion plans.”
Lobbying against the minimum wage were the Illinois Restaurant Association, the Illinois Retail Merchants Association, the Chicagoland Chamber of Commerce and the Illinois Hotel and Lodging Association.
“This ordinance will hit Chicago workers with a double whammy,” Restaurant Association President Sam Toia said Monday. “Fewer jobs will be available, and there will be more competition for those jobs from suburban residents. Those workers will spend their earnings back in their own communities, not Chicago.”
City officials said the cost of living is higher in the city, so a higher minimum wage is needed in Chicago than in downstate communities.
Burns and others pointed to other U.S. cities and states that have increased the minimum wage well above the federal rate of $7.25 that went into effect in 2009, saying their economies have not been damaged as a result.
Even a city rate on a track to $13 by 2019 was not enough to satisfy some unions, community activists and low-wage workers who pushed for a $15 rate and had the backing of Fioretti and Garcia.
Katelyn Johnson, executive director of Action Now, a union that is part of the Raise Chicago coalition that has been pushing for a $15 minimum wage for all workers, nevertheless declared the $13 rate a victory.
“Thirteen dollars is a good place to start, but it does leave out huge swaths of the population — hotel workers, domestic workers, tip workers,” said Johnson, who noted that workers who receive tips could in some cases earn less than the minimum. “It’s a good place to start, a good first step, but we have to keep on fighting, we have to push for more so we have a fair wage for everyone.”
Under current state law, tipped workers receive base pay of 60 percent of the minimum wage, or $4.95 an hour before the tips.
Under the new city law, those workers will continue to be paid 60 percent of the state minimum wage until July 1, when they will get an extra 50 cents an hour. In July 2016, they will get another 50-cent-an-hour boost. they will get cost-of-living increases in subsequent years.
The new city minimum wage would not apply to government-funded programs that provide temporary jobs to youths or transitional jobs to difficult-to-employ people like former inmates.
A statewide proposal by Sen. Kimberly Lightford, D-Maywood, includes the same three initial increases approved by the city. That would bring the statewide rate to $11 in mid-2017, but her legislation includes no further increases.
Meanwhile, it’s not clear that the state House can muster the votes to approve her bill or other legislation that would boost the minimum by differing amounts.
Republican Gov.-elect Bruce Rauner offered this reaction Tuesday in Springfield before the council vote.
“My recommendation to the mayor is that he keeps in mind the competitiveness for the city of Chicago. We do not want to increase unemployment in the city of Chicago and end up hurting many of the families we all want to help. I would encourage Mayor Emanuel to think about the minimum wage strategically in the same context that I’ve recommended for years, and that is let’s do it in the context of pro-growth reforms. Let’s make Chicago more competitive, let’s help reduce the regulatory burden on businesses in Chicago, let’s do workers’ comp reform, tort reform and a tax reduction on businesses in Chicago, and raise the minimum wage as part of that. That’s a win-win across the board.”
Source: Chicago Tribune