Illinois’s failure to increase its state minimum wage for this year inspires the banner image for this post at Quartz on state minimum wage increases around the country for 2015:
In 2015, minimum wage workers in 23 states and Washington, DC. will see bumps to their paychecks, to varying degrees.
Twenty of those states, and DC, saw increases on Jan. 1. Some of the increases are staggered, beginning on the first day of the year, with an additional increase over the next 12 months.
As I’ve said before, I wouldn’t oppose an increase in the national minimum wage, particularly one that was gradual, measured, and could be halted if it cost jobs. I think that a higher state minimum wage for Illinois would be foolish and the reason is highlighted by the map that accompanies the Quartz post:
The map shows that Illinois’s minimum wage is higher than that of any state it adjoins. What it doesn’t show is that most of Illinois’s population centers are on the state’s borders: Chicago is near both Indiana and Wisconsin, Rock Island borders Iowa, Rockford is near the Wisconsin border, East St. Louis on the border with Missouri, and so on. The exceptions are Bloomington, a college town that depends on state funding, Springfield, the state capital, and Peoria. Peoria’s unemployment rate is nearly 8%, a point and a half higher than the state average. Peoria needs jobs more than it needs a higher minimum wage. Under the circumstances a higher minimum wage is a prescription for driving business out of the state, something Illinois can hardly stand.
The states that have raised their minimum wage, particularly those that have raised them substantially and rapidly, e.g. Washington, are conducting a real-life experiment. We will soon be in a position to evaluate its results.
I’m ambivalent about nationalizing the minimum wage, perhaps it is because I live near the center of the state, but the odd thing to me is always similar treatment of the Chicago metro and downstate, when the cost-of-living in the Chicago metro is about 30% higher than downstate. It’s always odd to me to have wage assumptions act similarly between them.
Also, there is a question of the extent of minimum wage impacts. How many jobs/ employers will be impacted, is it just the low end family restaurants and (publicly-financed) social service providers? Dave is not driving to Gary, Indiana to eat at a cheap restaurant. Of course, if the increase in the minimum wage increases higher-end labor costs through some secondary impact, the effect may be broader.
When I think of someone hurt by an Illinois increase, I think of Quincy, Illinois, a small (40,000) Mississippi River town. No body lives on the Missouri side of the bridge, but there are gas stations, cigarette vendors, and firework stands, clearly creations of tax/regulatory differences between Illinois and Missouri, and it only takes two minutes from downtown Quincy to get there. I could see more fast food developing; maybe discount retail.
Exactly.
Certainly the history of Cook County sales tax increases has been a) to drive retail out of the county and b) to stop big box retailers from setting up shop in the country, in the city in particular.
I think a national minimum wage could go up a bit, but I much prefer to let locals set their own minimum wages. A reasonable minimum wage in suburban Texas is much different than a reasonable minimum wage in Brooklyn, NY.