Minimum wage plan helps workers and businesses alike

This month, hundreds of thousands of Illinois workers got a raise — and much-needed relief from the inflationary pressures that have been reducing the value of paychecks across our economy. Illinois raised its minimum wage to $13 an hour. The move was part of an incremental process the state initiated in 2020 to raise its minimum wage to $15 per hour by January 2025.While polling shows such a move has long been overwhelmingly popular, economic data shows that it represents good policy. In a tight labor market like the one employers are facing right now, higher minimum wages can improve job quality and combat labor shortages.Prior to the General Assembly’s work to increase Illinois’ statewide wage floor, 1.4 million adult workers were paid less than $15 per hour, according to research by the Illinois Economic Policy Institute and the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign. Majorities of these workers were women, white and age 30 and older. Another 38,000 were military veterans.The analysis also found that, once fully implemented, Illinois’ $15 minimum wage would boost incomes for directly affected workers by more than $6,000 per year — helping working-class families deal with rising costs and lifting more than 200,000 Illinois workers out of poverty. This translates to savings for taxpayers, because fewer workers living in poverty means less reliance on government assistance programs like food stamps and Medicaid.By increasing incomes and reducing poverty, higher minimum wages also promote job quality. This will help more employers attract and retain workers at the very moment that many companies are struggling to fill job vacancies. Studies have linked higher minimum wages with reduced employee turnover — meaning that higher minimum wages not only help employers fill jobs, but also help them keep workers in those jobs.For these reasons and more, claims that a higher minimum wage would lead to more unemployment should be laid to rest.Both across the country and in Illinois, there are more job openings than there are unemployed people. Just as business must compete for customers, they must also compete for workers. A higher minimum wage not only ensures that Illinois’ businesses have customers who can afford to purchase their products or services, but it also helps ensure businesses are offering a level of quality that can compete in today’s labor market.Illinois is not alone in raising its minimum wage.In January, 22 other states and the District of Columbia raised their minimum wages, delivering pay raises for 8 million workers. And, in the 2022 midterm elections, Nebraska voters approved a $15 minimum wage while Nevada voters approved a $12 minimum wage. In 2020, Florida voted 60% to 40% in favor of a $15 minimum wage. Each of these measures won with broad coalitions of support among Democrats, Republicans and Independents alike and represented rare moments of unity in our hyperpolarized politics.Finally, it is worth reiterating that Illinois became a $1 trillion economy last year. We are just the fifth state to achieve that feat. It is a testament to the competitiveness of Illinois’ businesses and the productivity of its 6 million workers. However, Illinois needs to continue attracting and retaining workers — from all backgrounds — and needs to ensure that they are not left out of the prosperity created by this $1 trillion economic engine.One of the best ways to do that is to invest in job quality for workers, and the labor market competitiveness that our businesses need to thrive. By working to raise the minimum wage to $15 per hour and beyond, Illinois has done just that.• Frank Manzo IV, MPP, is the Executive Director of the nonpartisan Illinois Economic Policy Institute.

Feeds,Region: AH,Region: Suburbs,Business,City: Arlington Heights

via > Business

January 29, 2023 at 01:44AM

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