Minimum wage increase now in effect

City says $1 bump in pay applies to an estimated 410K workers

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By Michael Romain

Editor

This past Sunday, the minimum wage for many non-tipped workers in Chicago jumped from $11 to $12 an hour, according to a statement released by Mayor Rahm Emanuel's office last month. 

The bump in pay is the result of an ordinance passed by the City Council in December 2014, which called for the city's minimum wage to increase gradually, by $1 a year, for non-tipped employees. 

According to the schedule set in the ordinance, the minimum wage was due to increase from $8.25 in 2014 to $13 in 2019, with each pay increase taking effect on July 1 each year during that period. 

For tipped employees, the minimum wage went from $4.95 in 2014 to $5.95 in 2016, with all, if any, annual increases thereafter tied to the rate of inflation, but not to exceed 2.5 percent. This year, minimum wage for those workers jumped to $6.25. 

Those annual CPI increases are contingent on the unemployment rate being lower than 8.5 percent during the preceding year of the scheduled pay bump, according to city officials. For non-tipped workers, the minimum wage will increase with inflation starting in 2020. 

In the statement, city officials explained that the 2014 ordinance will raise the minimum wage for 410,000 workers. They estimated that the ordinance will inject $860 million into the local economy by 2019.  

"No parents who work full time in the City of Chicago should ever have to raise their children in poverty," Emanuel noted in the statement. "Higher wages are good for families, communities and our economy." 

"Chicago's minimum wage ordinance not only provides Chicago employees with the compensation they need and deserve, but strengthens our economy," said Business Affairs and Consumer Protection (BACP) Commissioner Rosa Escareno in the statement.

"Working together with businesses, residents, local aldermen and other community stakeholders," she said, "Chicago is leading the way in creating an environment where a working family can put a roof over their head and groceries on the table without having to work multiple jobs."

For many business owners and industry representatives, however, the effect of higher minimum wages should be considered as one of a range of other factors — including higher property and sales taxes — that have made operating in the city burdensome, according to a report by the Chicago Tribune. 

"[The minimum wage bump] cannot be looked at by itself," Rob Karr, the head of the Illinois Retail Merchants Association, told Tribune reporters.

Karr's some 20,000 store owners across the state "have told him they are limiting growth and reducing hiring as they contend with the rising costs," the Tribune reported. "While some downtown businesses can absorb the wage hikes, 'we have businesses that have no idea how to make the next jump because they feel they have made all the cuts they can,' he said." 

According to the Tribune report, Chicago has "fielded 582 complaints about minimum wage violations since the ordinance went into effect in 2015, nearly half of them in the first year." 

Nearly 140 of those complaints have been fully investigated, resulting in "$127,000 in fines against employers and $304,000 in restitution for 487 employees," the Tribune reported, citing data from the city's Department of Business Affairs and Consumer Protection — the body responsible for enforcing the minimum wage ordinance.

CONTACT: michael@austinweeklynews.com   

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