CHICAGO – Governor Rod R. Blagojevich and Mayor Richard M. Daley today announced plans to introduce legislation during the November legislative veto session to raise the minimum wage to $7.50 an hour and index the minimum wage to inflation. They were joined by members of the Illinois General Assembly including State Senator Jacqueline Collins, State Senator Iris Martinez, State Senator Kimberly Lightford, State Representative Deborah Graham, and State Representative Marlow Colvin, labor leaders including AFL-CIO President Margaret Blackshere and other leaders in the fight for working families.
Under terms of the proposed bill, the state’s minimum wage would rise by $1 to $7.50 per hour beginning July 1, 2007. Beyond that date, the minimum wage would be indexed with the annual rate of inflation, meaning that each year the minimum wage will be recalculated to reflect the amount that price of goods and services increased. It has been estimated that the raise will directly benefit at least 500,000 Illinois workers.
“In 2003, we raised the minimum wage and it’s one of the best things we did. Almost four years have passed, and the time has come to raise it again. Except this time, we not only want to give the 500,000 men and women who earn the minimum wage a pay raise, we want to change the system so that hard working, minimum wage workers can count on their wages increasing as the cost of groceries, utilities, and housing increase too,” said Gov. Blagojevich.
“Today, many families are struggling to make ends meet,” Mayor Daley said. “Wages have been stagnant. The everyday cost of living has increased. That’s why I’ll work to increase the minimum wage during the veto session in Springfield and also support an annual increase tied to the cost of living or the inflation rate. I am committed to working with the Governor and all those who are with us today to give the people who need our support the most -- across Chicago and Illinois -- a better chance to succeed in life, to pay their bills and support their families.”
Governor Blagojevich fought for and signed legislation raising the minimum wage in 2003 from the federal level of $5.15 an hour to $6.50 an hour (the federal minimum wage remains at $5.15). While that difference meant an additional $1.35 an hour (or, an extra $2,808 a year for a full-time worker), earning the minimum wage still means earning a total of $13,520 a year. Since the Governor signed the 2004 increase, the Consumer Price Index grew by over 6 percent, so a $500 per month apartment rent in 2003 now costs $30 dollars more.
The current minimum wage annual salary represents only 67.6 percent of the 2006 federal poverty level for a family of four ($20,000) and also is just above the threshold for a single parent with one child ($13,200). The increase to $7.50 an hour will result in a pre-tax gross income of $15,600, an additional $2,080.
According to a paper published this month by the Economic Policy Institute, minimum wage earners have seen their purchasing power jump erratically as politicians have chosen to raise or hold the wage independent of inflation. Today states such as
Florida, Washington, Oregon, and Vermont have indexed the minimum wage to inflation. Their minimum wage workers don’t feel their purchasing power diminish as they wait for another increase and the states’ inflation has not sky-rocketed as critics predicted.
In addition, despite predictions from opponents of the minimum wage that its increase would harm the economy, since the higher wage took effect, Illinois has added more than 151,000 new jobs since January 2004, which is more than any state in the Midwest according to the Federal Bureau of Labor Statistics (BLS). The BLS also reports that the unemployment rate has fallen from 6.7 percent in January 2003, when the fight for the higher minimum wage began, to 4.4 percent today, which is below the national average and its lowest level since October 2000. Illinois has led the nation in job growth twice this year (April and July), which has never happened before in recorded history, and has been named the third best state in the nation for attracting new and expanded corporate facilities by Site Selection Magazine.
Inc. Magazine recently named Governor Blagojevich as the second best Governor in the nation for fiscal policy (Blagojevich was also named the top Governor for health care policy).
“There's a principle as old as the Bible -- a decent day's pay for a hard day's work,” said Lieutenant Governor Pat Quinn. “Raising the minimum wage for hard-working men and women in Illinois is the decent thing to do.”
“On behalf of over one million union members, I proudly join in support of the proposed increase of the minimum wage and the inclusion of the indexing factor. Illinois workers need a raise and a dependable one, year in and year out. It is good legislation and the Illinois AFL-CIO strongly supports it,” said Margaret Blackshere, President of the Illinois AFL-CIO.
With this legislation, Illinois would join four other states that have an indexed minimum wage. The other states are Florida, Washington, Oregon, and Vermont.