(WTVO) — Illinois businesses are bracing for how higher payroll costs will affect their bottom line as the state’s minimum wage was increased to $13 an hour on Jan. 1.

The hike was a part of Gov. JB Pritzker’s plan to gradually increase the minimum wage to $15 by 2025. Illinois has not increased its minimum wage since 2010.

Todd Maisch, president and CEO of the Illinois Chamber of Commerce, says the graduated plan is going to be especially painful to small businesses throughout the state, especially retailers and those in the service industry.

“Employers are trying to decide whether they will trim hours or trim jobs. In some instances, if they think they can get away with it, they will have to raise prices,” Maisch told The Center Square.

Maisch added that the Jan. 1 wage hike is just an added burden to businesses that are already bearing the weight of inflation.

“Governments cannot create demand; they cannot create revenue,” he said. “So that means that small businesses must decide how to cut costs. Way too few members of the legislature understand that basic fact. …Keeping wages artificially high makes it harder for inflation to go down, Maisch said, and raising prices is not an option for many businesses. Coming off of very aggressive inflation, that is the last thing that small businesses want to do. Over time, inflation impacts consumer behavior more and more. Consumers are spending less and less at restaurants and other places.”

Under the governor’s plan, the minimum wage will increase to $14 in 2024 and $15 in 2025.