It’s been a string of bad news for Illinois small business owners lately, but here’s a sliver of good news: Gov. Rauner vetoed a bill that would have increased the state minimum wage to $15 per hour (from $8.25 per hour) over the next five years. His reasoning was that while the proposal was well-intentioned, it ultimately hurts the workers it intends to help.
The measure was sent to the governor in May, at which point Rauner expressed support for raising the minimum wage if other economic reforms were passed to provide regulatory relief for businesses. As you know from the end of the budget saga, that did not happen.
Though the decision was met with disappointment by some lawmakers—Rep. Will Guzzardi, the bill’s House sponsor, said that he would push for an override of the veto—small business owners have breathed a sigh of relief. NFIB/IL praised the veto, echoing the governor’s reasoning.
“Raising the minimum wage to $15 an hour would hurt the very people lawmakers say they’re trying to help,” NFIB/IL State Director Mark Grant said in a statement. “Small businesses will bear the brunt of the cost, and their employees will pay the price in the form of fewer jobs and fewer opportunities.
“According to the NFIB Research Center, raising the state minimum wage to $15 an hour will result in 93,000 fewer jobs across the state and reduce Illinois’ real output by over $56 billion over the next 10 years.
“If the government dictates 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.
“This legislation does include a tax credit for employers, ostensibly to help offset higher labor costs, but it’s just a bit of misdirection. The bill comes with so many hoops that few small businesses could afford the time and effort to jump through them, and, even if they did, the credits wouldn’t come close to making up for a nearly 82 percent increase in the state minimum wage.”
