Illinois Governor Vetoes Plan to Raise Minimum Wage


 

On Friday, Illinois Republican Governor Bruce Rauner vetoed legislation that would have raised the state’s minimum wage, incrementally over a five year period, from $8.25 to $15. Rauner had said that he believed the hike in wage to be too severe. Illinois Chamber of Commerce expressed their support for the governors veto. The bill was approved in the Illinois House, 61-52, and Senate, 30-23.

“Mainstream economic theory and mainstream economic evidence strongly suggest that an increase in the minimum wage of this magnitude will hurt the very individuals it seeks to help,” Rauner said.

Advocates for the increase in wage had expected a veto from the governor, however were still angered about the decision. Many were hoping to see Illinois become the third state, after New York and California, to adopt the $15 minimum wage. Various states and cities have been increasingly taking action to raise their minimum wage to help aid in the rising cost of living since there has been a lack of federal action to address the issue. The federal minimum wage has been at $7.25 since 2009.

The Illinois bill would have increase the minimum wage to $9 in January; gradually increasing it up to $15 by 2022. Part-time, or seasonal workers under the age of 18, minimum wage would have been raised $12 an hour. The bill would have given small businesses time to adjust to the raise, offering employers with less than 50 workers a credit toward their income tax liability that is proportional to the wage increase.

Rauner justified his veto by citing a study published by the University of Washington (UW) earlier this year. The city of Seattle recently voted to increase their minimum wage toward $15 and the study from UW looked at the impact of Seattle haven risen its minimum wage to $13 an hour. The study concluded that the average low-wage worker lost money since employers resorted to reducing employee hours, or laying off workers, as a way to cope with higher labor costs. Rauner concluded that based off that study’s measures, Illinois’ low-wage worker would see a $1500 loss in earning per year. However, the UW study has been largely criticized by economists and advocates who point to methodological problems. Other research has found that an increase in the minimum wage increased a workers yearly pay with little or no impact on jobs.

Representative Will Guzzardi (D-Chicago), who sponsored the bill, argued the bills necessity to help workers who are struggling to provide for themselves while big corporations continue to strive.

“Once again, Gov. Rauner has shown that he’d rather project the profits of his corporate allies than help lift millions of Illinoisans out of poverty. We, the people of this state, know whose side the Governor is on. It’s not ours,” Guzzardi said.

Guzzardi has also said he will seek to override Rauner’s veto.

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