Hiking Illinois' minimum wage would drive up the cost of goods and services, and could result in the loss of some jobs, local business owners say.|
"They can raise the minimum wage all they want, but I have to change my prices accordingly," Michael Huggins, owner of Cup A Jo Cafe in downtown Moline. "Get ready to pay $4 for a small cup of coffee."
Mr. Huggins said he believes customers will continue to buy from him even if he has to increase prices, because many work downtown and are unlikely to drive to Iowa for a cheaper drink.
Illinois voters will be asked in November to vote -- in a non-binding advisory referendum -- on whether to increase the minimum wage from $8.25 per hour to $10 per hour for workers 18 and older.
If the majority of voters support the increase, the Illinois General Assembly then would decide whether to vote on it.
George Bingham, owner of Teske's Pet and Garden Center, said all of his employees make more than minimum wage, but it's likely many would want a raise if the minimum wage increased.
"If I have someone who makes $10 now; when the minimum wage goes to $10, he's going to want $12," Mr. Bingham said. "People who work for Teske's in Iowa are going to want the same pay as the workers in Illinois."
Proposing a minimum wage increase while neighboring states have lower rates proves Illinois' anti-business climate, Mr. Bingham said.
"Obviously, (the increase) would just be another strike against businesses in Illinois," he said. "And everyone knows the state of Illinois hates business."
Rock Island Mayor Dennis Pauley said he wants the minimum wage increased, but wants it done on the federal level, so all states have to comply. Otherwise, Illinois would be less competitive with Iowa, which has a $7.25 per hour minimum wage.
"I've had business owners say they can't compete with that," Mayor Pauley said. "They would close their doors."
East Moline Mayor John Thodos agreed that it could hurt Illinois' competitiveness with Iowa.
Bill Polley, an associate professor of economics at Western Illinois University in Macomb, said economists have done extensive studies on minimum wage increases and typically, hiking the minimum wage has a "slightly negative effect on employment," with some employers not filling vacant positions and some relying on self-serve kiosks.
However, the impact "tends to be a little smaller than many of the opponents would like to have you believe," Mr. Polley said. "It's probably not going to cause a huge spike, but gradually over time may increase the unemployment rate in one area, lets say, Illinois compared to Iowa."
Raising the minimum wage is needed to help move workers out of poverty, said Dino Leone, president of the Quad-City Federation of Labor.
"People making the current minimum wage, working 40 hours a week is a poverty wage based upon different studies that have been done," he said. "So this is absolutely necessary to raise this minimum wage to the new amount that they're talking about."
Mr. Leone said Illinois can't wait just because Iowa hasn't raised its minimum wage. "This is something that Brandstad, in Iowa, should have done a long time ago."
Josh Schroeder, a manager at Culver's in Moline, said a wage increase would be good for workers, but jobs could be lost to offset that added cost.
"I think a wage increase would be pretty beneficial, but as far as maintaining cheap labor and high profit margins, I don't think a lot of employees would make it through if the change would go into effect," he said.
Pryce T. Boeye, president and CEO of Hungry Hobo, said he's looking "almost exclusively" in Iowa to expand his business because of Illinois' business climate.
"I don't think it ever hurts to get people's opinions on important subjects like this," Mr. Boeye said. "But at the end of the day, we hope our legislators take everything into consideration, especially the deteriorating business climate in the state of Illinois."
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