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House Bill 5367 and Senate Bill 3821 provide for incremental
increases, starting on July 1st of this year.
Citing research by economists and Bureau of Labor Statistics
data, Employment Policies Institute Research Director Rebekah
Paxton said every one-dollar increase in the minimum wage can
trigger up to 5.5% price inflation.
“When you’re talking about a proposal like a $27 an hour minimum
wage, those increases could be much more drastic and much more
swift, depending on how it’s implemented,” Paxton told The
Center Square.
Paxton said California’s $20 minimum wage for fast food workers
is a real-life example. The measure took effect in 2024.
“Just a year after that policy went into place, food prices were
jumping over 14%. This is certainly something that’s not just in
a textbook or an academic paper. This is something that we’re
seeing in the real world,” Paxton said.
The minimum wage bills were filed earlier this month by state
Rep. Norma Hernandez, D-Melrose Park, and state Sen. Kimberly
Lightford, D-Maywood.
If the legislation is passed and signed by the governor, the
state minimum wage would rise from the current $15 per hour to
$17 per hour on July 1. Additional hikes would follow each
January 1 from 2028 to 2032. After 2032, the minimum wage would
automatically rise with the consumer price index, up to 2.5%
annually.
In addition to raising the state minimum wage, the legislation
would phase out the tip credit and raise the minimum wage for
workers under the age of 18 to match the mandated minimums for
workers 18 and older.
Paxton said Stanford University research showed that the
inflationary effects of minimum wage hikes hurt the poorest 20%
of the country.
“Especially for those poorer folks, especially for folks who may
be new to the work force, younger or entry level, they may be
more acutely affected by inflation, which is the reverse of what
folks are intending to do with this legislation,” Paxton said.
The National Federation of Independent Business said HB 5367 and
SB 3821 would also allow uninjured special-interest groups to
sue employers for alleged violations.
“Illinois’ small business community is already struggling with
the current minimum wage and paid-leave mandates. They can only
raise their prices so much to offset these additional costs,”
NFIB Illinois State Director Noah Finley said in a statement.
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