Economics Expert: $15 Wage Will Benefit Poor, May Decrease Employment | WGLT

Economics Expert: $15 Wage Will Benefit Poor, May Decrease Employment

Feb 18, 2019

Illinois could soon be the fifth state on the path to a $15 minimum wage.

With the measure sitting on Gov. JB Pritzker’s desk, the governor is expected to make good on his campaign promise any day now.

Critics say the wage increase would hit small businesses hard. Supporters say the minimum wage in Illinois has not been raised since 2010 and that it’s time workers at all levels earn a living wage.

Illinois Wesleyan University economics professor Michael Seeborg said they’re both right.

"Sometimes a slight decrease in employment—those workers clearly are hurt by the increase. But the net effect on the poor, I think, is a positive one,” he said.

Under the legislation, small businesses with less than 50 full-time employees would be eligible for a payroll tax credit. Starting in 2020, small-business employers would be able to take 25 percent of their employees’ withheld wages and keep it for themselves. The percentage withheld gradually decreases as the wage increases to $15 in 2025.

Seeborg said the small-business benefit will help.

“I think the idea is to give businesses an opportunity to adjust to higher labor costs,” he said. “And this type of system would do that without putting a perpetual burden on the state budget."

Pritzker promised increased wages on the campaign trail last year.

A signing event has not been announced, but Pritzker has said he intends to sign the measure ahead of Wednesday’s state budget address.

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