Minimum wage hike called bad for all involved
Raising the minimum wage does no one in Illinois any good, Patrick Hughes, co-founder of the Illinois Opportunity Project, argued recently.
“The reason is, unless you’re going to force a minimum wage down the throat of employers and have a concomitant requirement that they hire a certain amount of people for a certain amount of hours, they are going to cut their hours, cut their people and cut their labor costs, or else they won’t be able to make money, because there’s only so much they can pass onto consumers,” Hughes said on the radio program "Illinois Rising." “This has been tried on Seattle recently. It got a lot of feel good stories, but it is failing.”
Hughes went on the air to discuss the minimum wage increase, which has been particularly contentious for lawmakers, businesses, employers and residents.
A bill to raise the Illinois minimum wage to $15 an hour by 2022 passed the Illinois General Assembly in May. Cook County recently passed a local ordinance that will gradually raise the minimum wage by a dollar every year until it reaches $13 dollars an hour by July 2020. That ordinance took effect on July 1.
However, more than 50 municipalities in Cook County opted out of the wage hike.
Hughes asserted that the wage increase is detrimental to businesses and employees, citing a recent University of Washington study that found that hours of work for minimum wage earners were cut by 9 percent and the average low-wage worker in the city lost $125 a month.
The study also found that employers cut payroll, froze hiring, reduced hours or laid off employees.
Hughes admonished politicians pushing for the wage increase, saying they don’t care “about the economic policy and the economic impact,” but are instead invested in the idea of “fighting to raise your wages.”
But politicians should care about the impact because it has consequences, Hughes argued.
“There is such a social cost to this,” Hughes said. “Not only are hours reduced; people don’t get that first job or they lose the job they had at a lower rate. So what does that do? Now they’re out of work. There’s the social cost and the social stigma of that. And then, someone is going to have to pay for welfare, for food stamps or for whatever. So, the beat goes on and on with these bad policies and how they impact people – particularly poor people – negatively that the same (politicians) promoting these policies said they want to protect.”
“Illinois Rising” is hosted by Dan Proft, who is a principal of Local Government Information Services, which publishes this publication.