CARBONDALE — On Thursday, the Illinois House of Representatives joined the Illinois Senate by passing SB 1, a bill that would raise the minimum wage in the state to $15 by Jan. 1, 2025. The minimum wage would increase to $9.25 per hour on Jan. 1, 2020; $10 on July 1, 2020; then increase $1 per hour each year on Jan. 1 until it reaches $15 per hour on Jan. 1, 2025.
The vote was 69 in favor of the bill and 47 opposed, with one representative voting present and one not voting. All of our local legislators, both Republican and Democratic, voted no on the bill.
Don Welge, CEO and president of Gilster-Mary Lee Corporation, said the new minimum wage bill is bad for his businesses and others around the state.
“We will certainly be forced to automate more and move more of our work into Missouri plants. Some of the same people would still be employed, but they would have to drive another seven or eight miles into Missouri to work,” Welge said.
Also, the company might be forced to close a plant or two. Gilster-Mary Lee currently has six plants in Missouri and six in Illinois, with an equal number of employees in each state. The estimated cost to the business will be in the millions of dollars.
“The cost of doing business in Illinois already is higher than Missouri because Illinois has higher unemployment and workers' compensation rates,” Welge said.
Illinois pays workers’ compensation and unemployment costs of about $600 per employee per year, or roughly $50 per employee per month.
“We make private brand foods rather than national brands. It is expected to be cheaper than a national brand even though it is equal quality,” Welge said.
Welge said they will have some time to make decisions about how to best handle the increased costs. “Our wage rates are higher than the new Missouri wage rate is to start with. We won’t do anything immediately, but we will start planning,” Welge said.
State Rep. Terri Bryant also used Gilster-Mary Lee as an example of a business that will be hurt by the new minimum wage. She said the people who work at Gilster-Mary Lee are generally unskilled labor. They start at a dollar more than minimum wage and get regular wage increases, profit sharing and some benefits.
“I used that as an example because they basically they sit on the bridge. When they leave — and make no mistake, they will leave — those jobs are gone,” Bryant said.
“The sad part of this is the people it will help the most are the ones it will hurt the most — people making minimum wage with fewer skills. Those are the jobs that can be eliminated through automation,” Welge said.
Welge thinks Illinois is way off-base by trying to implement the same wage rate in Southern Illinois as in Chicago.
“It doesn’t cost as much to live in Southern Illinois as it does in Chicago. I think the rest of the state ought to have more to say than they do,” Welge said. “$15 may not be a challenge for Chicago employers. $15 is big for us.”
Welge also worries about the effect other tax increases Gov. Pritker is talking about implementing, like raising motor fuel and income taxes. He said Illinois already ranks as the 49th best place to start a manufacturing company. Texas is ranked first, and Indiana, right next door, is ranked fourth.
“I grew up in Illinois and so did my family. I have a lot of roots in Illinois, but it sure is sad to see it on a path to self-destruction,” Welge said.
Bryant said the new bill is terrible for Southern Illinois. One area that really concerns her is higher education. The new wage will cost the SIU system $12.7 million and University of Illinois $70 million.
She talked with administrators in Murphysboro Unit District 186. They expect to see their costs rise about $100,000.
Bryant stressed this is all new revenue the school will have to offset, due to the minimum wage bill.
She said another group that will be affected in not-for-profit organizations. Their big donors are often business owners. With their increased costs, they may no longer be able to donate.
“It’s just going to have such a big ripple effect. I’ve really been a glass half full person, but today I do feel like the sky is falling,” Bryant said Thursday evening.
Rep. Jerry Costello, D-Smithton, said he is a strong supporter of working families and believes employees should earn a livable wage. However, he also believes any legislation should include strong protections for small businesses that would help offset the cost of higher wages.
“Illinois is an incredibly economically diverse state with sharp regional differences unique to individual communities across the state. Any efforts to raise wages should carefully examine these factors to avoid adding to the burden that small businesses in our state face,” Costello said.
He added that while he appreciates the efforts of those who supported this legislation, he could not support it because it fell short on helping small businesses deal with the increased cost.
Reps. Patrick Windhorst, R-Metropolis, and Dave Severin, R-Benton, also voted against the bill.
Groups like the Fight for $15 and Think Big Illinois applauded the bill’s passage in the House.
Adriana Alvarez, a Chicago McDonald’s worker, Fight for $15 member and union leader, said nobody gave the Chicago workers a shot when they first walked off their jobs in 2013, demanding $15 per hour and union rights. So they took action to make sure their voices were heard.
“Today’s vote by the House to pass $15 per hour shows what happens when workers stick together and act like a union: The impossible becomes reality. When Gov. Pritzker signs $15 into law, the lives of some 2 million workers across the state will change. We will have money to buy shoes for our kids and keep the lights on. We’ll be able to put breakfast on the table and maybe go out to the movies every now and then,” Alvarez said.
She added the group is not stopping with the minimum wage victory. They will continue to keep on striking, marching and speaking out until they win the union rights they have demanded since Day 1.
“We know that by sticking together, we will keep on winning,” Alvarez said.
Think Big Illinois said the bill not only raises the minimum wage for Illinois families, but also supports small businesses. In the bill, businesses with 50 or fewer full-time employees, which includes more than 80 percent of Illinois small businesses, stand to benefit from tax credits. The bill also includes additional help for businesses with five or fewer employees, which makes up half of Illinois small businesses.
In the bill’s first year, small businesses will see a 25 percent credit on their withholding. A tax credit remains in place for all small businesses until 2025. After that, businesses with 50 employees or fewer would receive an extra year of the credit, while the credit would extend until 2027 for businesses with five employees or fewer.
Think Big Illinois Executive Director Quentin Fulks said Thursday the bill helps working families and supports the small business community.
Pritzker is expected to sign the bill in the coming days, according to previous reporting in The Southern.