Illinois House committee approves Gov. Blagojevich's plan to increase minimum wage

SPRINGFIELD - Governor Rod R. Blagojevich today praised the House Labor Committee for approving legislation that would increase the minimum wage to $7.50 per hour in July 2007.  Under terms of the Governor's bill, the state's minimum wage would increase incrementally, first by $1.00 to $7.50 per hour beginning July 1, 2007.  Up to 647,000 Illinois workers are expected to benefit from the minimum wage increase either directly or indirectly.  In addition, 269,000 children are expected to benefit.  The Governor first proposed increasing the minimum wage earlier this year.  Senate Bill 1268, co-sponsored by Representatives Marlow Colvin (D-Chicago), Larry McKeon (D-Chicago), Louis Lang (D-Skokie), Cynthia Soto (D-Chicago), and Deborah Graham (D-Chicago), now moves to the House for consideration. 

 

Fulfilling the Governor's goal of providing annual increases, the legislation will include annual increases minimum wage going up in July 2008 to $7.75, $8.00 in July 2009, and $8.25 in 2010.  The legislation includes a youth wage of 50 cents differential for workers under 18.  It also adds a new training wage differential that allows all employees regardless of age to be paid up to 50 cents less for their first 90 calendar days of employment with that employer.  The legislation goes into effect July 1, 2007.

 

"Someone working forty hours a week, fifty-two weeks a year, at the minimum wage earns just over $13,000.  You can't raise a family on $13,000 a year.  Nearly 650,000 men and women in Illinois work for the minimum wage and they have nearly 300,000 children.  So increasing the minimum wage means helping nearly one million people keep up with the cost of living and it means making it a little easier for them to get by.  I applaud the House Labor Committee for doing the right thing today," said Gov. Blagojevich.

 

The passage comes just after the Economic Policy Institute (EPI) released a new study demonstrating the importance of minimum wage increases for working individuals.  According to the study by Paul Wolfson, of Dartmouth College, in states that have increased the minimum wage, wages have gone up without adverse affects on employment.  The study debunks the argument commonly used by opponents of minimum wage increases, which asserts that wage increases for lower paying jobs reduces the number of available jobs.  In fact, according to the EPI data, increases in the minimum wage lead to higher wages without reducing either employment or labor supply.

 

"This bill will ensure that working families in Illinois are able to keep up with cost of living increases, and I am thankful my colleagues in the Labor Committee took this swift action," said Rep. Colvin, Sponsor of the Legislation.

 

"For millions for families throughout the state, making ends meet is becoming more and more difficult as costs for things like groceries increase," said Rep. McKeon-Chairman of the House Labor Committee and Chief Co-sponsor of the legislation.  "With this bill, people earning the minimum wage will see their pay increase not once, but annually."

 

Last month, Governor Blagojevich and Chicago Mayor Richard M. Daley were joined by members of the Illinois General Assembly, labor leaders and other leaders in the fight for working families when they first announced the proposed minimum wage bill.  The Governor and Mayor have vowed to push for its passage during the fall veto session so those Illinois citizens who need support the most will benefit and be able to better support themselves and their families.   

 

"I would urge my colleagues in the House to support this important bill that will help millions of Illinois parents provide for their children.  Increasing the minimum wage over time just makes sense," said Rep. Lang, Chief Co-sponsor of the legislation.

 

"So many hardworking people in Illinois are living paycheck to paycheck, struggling to make ends meet with the current minimum wage.  The House Labor Committee recognizes the importance of ensuring that parents need not choose between providing food or paying bills," said Rep. Soto, Chief Co-sponsor of the legislation.

 

"I would urge the House of Representatives to follow the example set by the Labor Committee and pass this important bill.  This bill will make life that much easier for working people by helping them keep up with cost of living increases," said Rep. Graham, Chief Co-sponsor of the legislation.

 

Gov. 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 only a total of $13,520 a year.  That means 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 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.

 

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 152,000 new jobs since January 2004, which is more than any state in the Midwest according to the Federal Bureau of Labor Statistics (BLS).  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).  In addition, unemployment rate has fallen from 6.7 percent in January 2003, when the fight for the higher minimum wage began, to 4.1 percent today, which is the state's lowest level on record.