(The Center Square) – Illinois’ minimum wage will increase Monday to nearly twice the federal minimum and well above most neighboring states.
Non-tipped workers on the lowest rung of the wage ladder will start the new year on Jan. 1 with a raise to $14 an hour. It’s the sixth increase for Illinois since 2019. The wage will increase to $15 an hour in 2025. The federal minimum wage is $7.25.
Julie Yurko, president and CEO of the Northern Illinois Food Bank, said any financial relief is especially vital since the pandemic, which has driven up the number of food network users by 80,000 a month.
“I remember back in 2019 when [Gov. J.B. Pritzker] came out with his new plan for minimum wage, and that was to get it to $15 an hour by 2025, which is fantastic,” she said. “The truth about hunger in America is that it is an economic issue. It is really tough for many of our working families to make ends meet. Their wages are not keeping up with the cost of housing, food, education, medicine and health care.”
Business and some policy groups say a rising minimum wage will lead to higher consumer costs, already elevated by inflation, job losses and fewer hours for many workers.
Starting Jan. 1, tipped worker wages increase to $8.40, up from $7.80. Meanwhile, youths who work less than 650 hours annually will see a rise to $12 an hour.
As hopeful as that sounds, Yurko said all this is not likely to reduce demands at the Northern Illinois Food Bank, which welcomes 550,000 people to its network monthly for support. This is a 70% increase since pre-pandemic times, according to Yurko.
“I don’t think it’s going to have a meaningful impact on the number of folks we see coming,” she said. “While it will help, the economic issue of having a job that pays a living wage remains.”
Others warn of the economic impact on small businesses and consumers from the wage increase.
“A minimum wage hike will bring higher costs to businesses, which are usually passed on to consumers in the form of higher prices. While larger businesses can often absorb higher labor costs, unfortunately, these increases fall hardest on small businesses,” said Bryce Hill, director of fiscal and economic research at the Illinois Policy Institute. “Illinois already has an unfriendly business climate. Adding to the financial burden might deter new businesses and drive out existing employers, which may end up costing Illinoisans their jobs.”
The minimum wage is $7.25 an hour in neighboring Indiana, Iowa, Kentucky and Wisconsin. Missouri’s minimum wage increases to $12.30 on Monday.
Greg Bishop contributed to this report