If some state lawmakers get their way, Illinois employers would be facing an 82 percent increase in their labor costs over the next five years.
House Bill 198, Amendment 1 would increase the state’s minimum wage rate to $15 per hour by 2022. Minimum wage would rise from $8.25 per hour to $9 on Jan. 1, 2018; to $10 on Jan. 1, 2019; to $11.25 on Jan. 1, 2020; to $13 on Jan. 1, 2021; and finally to $15 on Jan. 1, 2022.
An 80 percent labor cost increase is out of the question for small businesses, and a recent analysis from the NFIB Research Center showed just how damaging the proposal would be. According to the report, raising the Illinois minimum wage to $15 per hour by 2022 would lead to 93,000 fewer jobs across the state—as well as a $56 billion reduction in output—over a 10-year period. Plus, small businesses would be hit the hardest: Nearly 56 percent of the projected job losses would be from the small business sector.
“Small businesses operate on notoriously thin margins,” says NFIB/IL State Director Mark Grant. “If the government mandates an increase in the cost of labor, employers have two options. They can raise prices, or they can try to get by with fewer workers. If you can’t afford as many workers, you’re going to be very careful about the workers you do hire. You’re going to want employees you know can do the job. You can’t afford to take a risk on people with little or no experience.”
At this writing, HB 198 was on its third reading in the House. NFIB/IL continues to fight against it.
