Illinois Raises Minimum Wage to $15 per Hour
Illinois will increase its minimum wage to $15 per hour on January 1, 2025, marking the final stage of a phased increase enacted in 2019. This brings the state in line with over 20 others raising their minimum hourly wages this year. The increase affects tipped workers, whose minimum wage will rise to $9 per hour from $8.40, and workers under 18, whose minimum wage will increase to $13 per hour. Governor JB Pritzker celebrated the milestone, stating that the increase fulfills a promise to Illinois working families and contributes to a stronger, more equitable economy.
Chicago’s Minimum Wage Increase
Chicago’s minimum wage also saw an increase earlier in the year. On July 1, 2024, the city raised its minimum wage to $16.20 per hour for employers with four or more workers, and the tipped minimum wage to $11.02. These annual increases are based on either the Consumer Price Index or a 2.5% increase, whichever is lower.
Industry Reactions and Concerns
The Illinois Restaurant Association and some restaurant owners and servers have expressed concern over the impact of the increased minimum wage, particularly the higher tipped minimum wage in Chicago. They argue that the added labor costs will force them to raise menu prices, potentially leading to decreased customer tips and impacting profitability. Concerns include potential staff reductions or shifts to counter service to mitigate costs.
National Minimum Wage Stagnation
In contrast to the state and city increases, the federal minimum wage has remained stagnant at $7.25 per hour since 2009. This prolonged period without an increase has significantly eroded purchasing power, according to Business for a Fair Minimum Wage.
Positive Impacts of Higher Minimum Wage
However, some business owners report positive experiences with higher minimum wages. Mike Draper, owner of Raygun, a clothing and decor company, stated that investing in employees through higher wages leads to significant returns. Aaron Seyedian, owner of Well-Paid Maids, echoed this sentiment, attributing low employee turnover and record revenue to their fair wage policy.
National and Local Minimum Wage Trends
Fifteen states, including Washington D.C., currently have or will soon phase in a $15 or higher minimum wage. Washington state boasts the highest minimum wage at $16.66. Additionally, many cities and counties are also increasing their minimum wages, although some local ordinances have faced legal challenges.