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 gradual increase mandated by legislation signed in 2019 by Governor JB Pritzker. This increase affects over 20 states enacting minimum wage hikes in 2025, solidifying a national trend towards higher minimum pay. The law also raises the minimum wage for tipped workers to $9 per hour (up from $8.40) and sets the minimum wage for workers under 18 at $13 per hour (up from $12).
Governor Pritzker hailed the increase as a fulfillment of his promise to build an economy that benefits all Illinoisans. He stated in a December press release that the higher minimum wage “honors the workers who power our state and ensures they can better support their families, bringing us closer to a stronger, more equitable economy for all.”
This state-level increase comes on the heels of a July 1st Chicago minimum wage increase to $16.20 per hour for employers with four or more workers. Chicago’s minimum wage is adjusted annually based on the Consumer Price Index or a 2.5% increase, whichever is lower. The city also raised its tipped minimum wage to $11.02.
However, the Illinois Restaurant Association and some restaurant owners and servers have expressed concerns about the impact of the increased minimum wage, particularly the higher tipped minimum wage in Chicago. They argue that the additional labor costs, compounded by inflation, will necessitate menu price increases, potentially leading to reduced customer tips and forcing restaurants to cut staff or switch to alternative service models to maintain profitability.
Conversely, some business owners argue that a higher minimum wage is beneficial for their businesses. Mike Draper, owner of the clothing and decor company Raygun, stated in a news release that investing in employees through higher wages yields substantial returns. Similarly, Aaron Seyedian, owner of Well-Paid Maids, attributed low employee turnover and record revenue to their commitment to fair wages.
The federal minimum wage, which has remained at $7.25 per hour since 2009, stands in stark contrast to these state and local increases. According to Business for a Fair Minimum Wage, this marks the longest period without a federal minimum wage increase in history, resulting in significantly eroded purchasing power compared to past decades.
Currently, fifteen states, including Washington D.C., have a minimum wage of $15 or higher, or are scheduled to reach it. Washington state currently boasts the highest state minimum wage at $16.66. Furthermore, numerous cities and counties are also implementing their own minimum wage increases, highlighting a broader movement towards higher minimum pay across the country, although some local ordinances have faced legal challenges.