Study says employees could earn $7k per year more with minimum wage hike

News

The Illinois Senate approved a plan to increase the state’s minimum wage to $15 an hour on Thursday, a change which would be phased in over the next six years.

Some critics say the move will take a toll on businesses, non-profits, and government agencies.

A new study shows a higher wage could not only boost incomes, but reduce poverty and ultimately grow the Rockford economy.

The study, by the Illinois Economic Policy Institute, says raising the minimum wage to $15 an hour could be good for the Rockford area.

The study shows that a little over 37,000 employees could be directly affected, mostly women. 

It also suggests that worker turnover would be reduced, and employers would gain access to a larger pool of applicants. Employees would earn an average of 7,000 more a year.

The wage hike could also add $121 million more to the stateline economy, leading to more spending.

But not everyone agrees.

“I know most people will certainly be able to take care of their children better, take care of their family, and provide for better needs, but will it go directly back into the economy? I don’t think it will have that big of an impact,” said Einar Forsman, President and CEO of the Rockford Chamber of Commerce.

Forsman says it could be bad for some local business owners in the long run.

“Eighty-percent of our members have ten employees or less, so these are very small businesses, so that’s a pretty significant impact,” Forsman said. “That jump, from current minimum wage to $15 an hour, represents a $13,000 cost per-year, per-employee, for those who are paying minimum wage. So, that’s a challenge for any small business to absorb that kind of cost so quickly.”

Gov. J.B. Pritzker said, during a recent stop in Rockford, that giving people more will help them help themselves.

“We want to be of assistance to you, here in Rockford and across Winnebago County, to make sure that we’re lifting up working families and creating jobs and raising wages,” he said.

The bill now heads to the House for approval.

Pritzker previously said he wanted the Illinois legislature to have something passed and on his desk by the time of his State of the State address in two weeks.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Made in the Stateline

More Made in the Stateline

Education Matters

More Education Matters

Behind the Badge

More Behind the Badge

Stateline Strong

More Stateline Strong