State minimum wage reaches $8 today

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Minimum wage workers in Illinois will see a pay bump of 25 cents an hour starting today, thanks to automatic increases in the minimum wage passed in 2006.

Taking the minimum from $7.75 to $8 an hour, the hike is the third of four increases signed into law by then-Gov. Rod Blagojevich in 2006. The final increase will take effect July 1, 2010, and will bring the state's minimum wage to $8.25.

The increase will affect more than 390,000 workers, Illinois Department of Labor spokeswoman Anjali Julka said Monday, 80 percent of whom are working adults. Nearly 100,000 minimum-wage workers who will be affected by the increase are parents, she said, and nearly 60 percent are women.

The hike means an increase of $520 per year for a full-time worker, raising annual salary to $16,640. The federal poverty line is $10,400.

While the increase could certainly help struggling workers, it could also deal a blow to businesses that are trying to stay afloat in the national recession. Businesses on the brink may have to raise prices or cut staff positions, DeKalb Chamber of Commerce Executive Director Jim Allen said.

The hike will cost employers an average of 30 cents more per hour, according to the Illinois Retail Merchants Association, because benefits are based on a percentage of the wage.

"Many businesses right now are on the margin of keeping their heads above water," Allen said. "By adding this additional cost, you're going to end up laying people off and, in some cases, causing companies to go under."

It's not likely such a dramatic result would be seen locally from the 25-cent increase, Allen said, because many local businesses already pay their employees more than minimum wage. He speculated the population most likely to be affected would be high school and college students working summer jobs.

"This could do away with a lot of those summer positions," he said. "If it becomes cost-prohibitive, they're just going to say, 'We don't need those employees.'"

The hike makes Illinois one of seven states with a minimum wage of $8 an hour or more, according to the U.S. Department of Labor. The other states are California, Connecticut, Massachusetts, Oregon, Vermont and Washington. Washington employers pay the highest minimum wage in the country, at $8.55.

Eight states adjust their minimum wage rate annually based on inflation, the Consumer Price Index or cost-of-living formulas, according to the Department of Labor. Those are Arizona, Colorado, Florida, Missouri, Montana, Oregon, Vermont and Washington.

The national minimum wage is $6.55; it will increase to $7.25 July 24.