SPRINGFIELD – A minimum wage increase appears headed for approval without any support from Republicans this week after passing its final committee hurdle Wednesday, Feb. 13.
Senate Bill 1, which would increase the state’s minimum wage from $8.25 to $15 per hour over a six-year period, passed the House Labor and Commerce Committee on a 19-10 vote with all Democrats supporting it and all Republicans voting against.
Democratic leadership believes it will be on its way to Gov. J.B. Pritzker’s desk by Thursday.
“We’ll call it on the floor (Thursday) sometime after 1:30 in the afternoon and my expectation is the bill will pass,” House Speaker Michael Madigan, a Chicago Democrat, said. “My expectation is that there will be no Republicans in the House voting for the bill.”
Republicans, on the other hand, said the fast-tracked advancement of the measure puts an end to a short-lived era of good feeling between the parties at the Capitol.
“This is a change of attitude since last month,” Republican House Leader Jim Durkin said. “There was all these platitudes and statements that were made about how we were going to work together and solve these problems. That is not the case today. Republicans have been shut out in negotiating in the House, and we have had no voice with the administration.”
In a near three-hour committee meeting with a large contingent of minimum wage advocates present Wednesday, the business and labor interests restated the same arguments that have driven the discussion in the past several weeks.
Democrats cited studies which said increases will drive economic growth and cause no job loss; Republicans questioned those studies and replied with their own numbers and testimony from business owners.
Despite concerns from Republicans of a rushed process to approve the bill, which won’t take effect until January 2020, Rep. Will Guzzardi, D-Chicago, said the bill was years in the making and would “earn good faith” with minimum wage workers.
“We have discussed this exact bill for two years,” Guzzardi said. “By acting, by showing the folks of Illinois – who elected this legislature and this governor based on promises of doing things like this – to show these folks that we heard them and that we are taking action to make their lives a little bit better, that’s why we are moving fast.”
Throughout the committee, Republican lawmakers acknowledged the bill’s passage seemed preordained, but they persisted with questions.
Rep. Steve Reick, a Woodstock Republican, asked about a tax credit in the bill which would apply to businesses with 50 full-time equivalent workers or fewer.
David Harris, Gov. Pritzker’s revenue director appointee, said the 50-employee equivalent would likely mean any business whose employees worked 2,000 hours or fewer in a week, since a 40-hour week is considered full-time.
However, he said the Department of Revenue and the Legislature’s Joint Committee on Administrative Rules could define the amount of hours that equal the 50 full-time employee equivalent.
That tax credit would start at 25 percent of the difference between the current minimum wage and an employee’s wage in the final quarter of the previous calendar year. It would decrease by 4 percent each year until it hits 5 percent in the final two years.
Rob Karr, president of the Illinois Retail Merchants Association, said there was also qualifying language in the bill which would exclude a lot of businesses from taking advantage of the credit.
Rep. Allen Skillicorn, an East Dundee Republican, asked what provision the bills had in place to deal with workers who would be laid off because their labor is “only worth $10-$11.”
Guzzardi said studies indicate the effect on job loss would be “nil,” and said it’s the state’s job to step in when “the invisible hand of capitalism isn’t supporting people.”
Rep. Tom Weber, who owns a construction company, said the bill adds expenses when the cost of doing business in Illinois is already high due to workman’s compensation and insurance rates among other factors.
Despite opposition from Republicans and many in the business community, at least one business organization testified in favor of the bill despite one of its members being a vocal opponent at the hearing.
Mike Noonan, the Illinois Restaurant Association’s lobbyist, said he was thankful for legislators’ willingness to compromise on a tip credit which allows employers to pay 60 percent of the minimum wage if an employee makes the other 40 percent in tips.
Democrats also cite as a compromise a training wage provision which allows employers to pay $2 less than the $15 minimum to teen workers with less than 600 hours worked at a business within one year.
They also said the six-year rollout was the product of compromise, starting with an increase from $8.25 to $9.25 on Jan. 1, 2020 before increasing to $10 on July 1, 2020 and $11 on Jan. 1 2021. After that, it would increase by $1 every January until it hits $15 in 2025.
But the Illinois Retail Merchants Association and several downstate business owners testified of their continued opposition to the bill, reiterating concerns of a lack of compromise which they cited at a Capitol press conference earlier in the week.
At that press conference, business owners and managers spoke of relocating, closing their doors, jacking up hotel rates from $80 to $125 in Springfield, raising costs of menu items, laying off entry-level workers and other possible impacts.
The group has proposed an alternate geographic minimum wage with a $15 rate in Chicago, $13 in the suburbs and $11 in downstate counties.
But the bill is set for a vote tomorrow without those provisions included, and Madigan believes all in the Democratic caucus will support it.
Gov. J.B. Pritzker, who held a press conference last week celebrating the bill’s passage in the Senate, has indicated he would like to sign the bill prior to his Feb. 20 budget address.
