Minimum wage hike to test 2014 governor candidates
CHICAGO – The long-percolating issue of Illinois’ minimum wage rate could take center stage throughout the 2014 election campaign as Gov. Pat Quinn pushes to raise it by year’s end while his Republican challengers fine-tune arguments that it could backfire on workers who want to keep their jobs.
Quinn wants Illinois to hike its minimum wage from $8.25 an hour to at least $10, an effort that coincides with a national Democratic strategy to make the economy and income differences a prominent theme in this year’s elections.
On the other side, a coalition of business groups is ready to oppose those efforts, saying a wage hike pushes employers to cut jobs. One Quinn challenger, Winnetka businessman Bruce Rauner, already has been criticized for reversing his position on the issue, while all four Republican gubernatorial candidates are set to attend a Feb. 4 Illinois Manufacturers’ Association forum, where organizers say the minimum wage will be a main topic.
Roughly 1.1 million people in Illinois make the state minimum wage, meaning a full-time minimum wage worker makes roughly $17,000 annually. Illinois last raised its minimum wage in 2010 through a four-step increase, and the state’s rate is the highest among Midwestern states, $1 more than in neighboring Iowa, Indiana and Wisconsin.
Experts say the issue will be a tough one for GOP candidates, especially leading up to the March 18 primary. The idea of raising the rate is something the party typically opposes as bad for business, but it’s popular with voters.
“Republican candidates ... have to finesse this issue in the primary where they don’t alienate primary voters and, at the same time ... leave themselves to appeal to the (general) electorate,” said David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University.
The candidates detailed their views on the issue in an Associated Press campaign questionnaire. State Sens. Kirk Dillard and Bill Brady and state Treasurer Dan Rutherford all say they are against an increase. Rauner said he’d support an increase if the national rate of $7.25 per hour is raised or Illinois makes other business reforms first – a shift from previous statements in which he’d advocated cutting the state’s rate to the national minimum wage and said he was “adamantly” against raising it.
His reversal made headlines last week, but it’s not the first time an Illinois candidate has struggled with the issue.
In 2010, when Brady was the Republican nominee against Quinn, he said he wanted to equal or adopt the federal minimum wage – which was interpreted to imply he wanted to cut Illinois’ rate. His staff quickly said that was untrue, but Quinn would often accuse Brady of wanting to cut the rate while on the campaign trail.
Brady wrote in the 2014 AP questionnaire that he wants a moratorium on increases until the federal rate catches up. He called raising the rate “counterproductive.”
“Business considers many factors when deciding to expand or add staff, and the cost of labor is certainly one of those prime considerations,” he wrote.
Dillard in 2006 voted for raising the state’s minimum wage but now says he’s against it, noting Illinois’ rate is among the highest in the country.
“Last decade, economic times were better and Illinois hadn’t raised its minimum wage up to the fourth highest in the country,” he told The Associated Press Sunday.
“I believe the upper echelons of the minimum wage and the different cost-of-living adjustments need to be set by the marketplace.”
Dillard said increasing the rate is risky considering Illinois’ high unemployment and fiscal problems. “Small businesses will be impacted the most and these are the very businesses that employ the bulk of Illinois residents,” he wrote in his questionnaire.
Rutherford doesn’t want any increases. “I believe every American should be able to make as much money as possible, legally and ethically. State government should not put an artificial cost of doing business increase on a business, church or local unit of government,” he wrote in his questionnaire.
Echoing the revised stance he laid out in media interviews last week, Rauner told the AP that he’d favor an increase if the state adopts “creative solutions to avoid further damage to our state’s already shattered business climate,” like incentives for small businesses.
Democrats, who maintain supermajorities in both chambers of the Illinois Legislature, could try to push the issue through this year on their own.
Quinn, a Chicago Democrat, has characterized the differences over the minimum wage as part of a “clash of values” with the other candidates.
“The question is, people are making $8.25 an hour in Illinois. That’s not enough in my book,” he told The Associated Press in a year-end interview in December. “To have a Republican candidate running around saying it’s too much for tough jobs, I think they really ought to examine their conscience.”
His Democratic primary challenger, Tio Hardiman, the former head of an anti-violence group in Chicago, told the AP he’d like to see the hourly rate as high as $12 an hour but only if the state would simultaneously reduce or eliminate a tax on corporations.
Studies on the impact of raising the minimum wage have been mixed.
Traditionally, economists say significantly raising it can lead to job loss as companies struggling to make payroll respond by cutting workers or hours. However, smaller increases, especially when times are good, typically have little effect.
Geography also is a factor. Raising the rate in the Chicago area, where both wages and the demand for workers are greater, won’t be felt as much as in downstate Illinois, according to Fred Giertz, an economist at the University of Illinois’ Institute of Government and Public Affairs.
Business groups don’t see any upside. The Illinois Retail Merchants Association, which represents 20,000 Illinois businesses and is part of a coalition fighting any proposed increase, says raising the rate would kill jobs.
But unions aren’t persuaded.
“People desperately need to have their wages raised,” said Roberta Lynch, the deputy director of American Federation of State, County and Municipal Employees Council 31. “We think the Illinois economy will improve if more people have more money to spend.”