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Illinois businesses concerned about losing more jobs to neighboring states

8 months ago By Brady Cremeens, Illinois News Network

When Gov. Pat Quinn, with his talk of comeback and rebuilding, again argued for a push in the state minimum wage, he probably wasn’t thinking of Ryan Mulkey and his family restaurant’s signature Henny Penny Chicken.

But Mulkey says he’ll have fewer workers serving up those homestyle specials if the governor gets his way with a 22 percent increase to the minimum wage in Illinois, proposed last week by an optimistic Quinn during his State of the State.

"A higher minimum wage inflates the cost of everything else,” said Mulkey, the co-owner of Mulkey’s in Rock Island. “We try to pay our employees well, but requiring over $10 an hour means we either have to reduce jobs for our night workers - who are usually high school kids cleaning the kitchen and setting up tables and that sort of thing - or cut hours from our other employees."

Lawmakers on both sides of the aisle expressed concern that Mulkey’s assessment is shared by other businesses and that the governor’s proposed solutions would hurt the state’s economy.

Only Nevada and Rhode Island have higher unemployment rates than Illinois, at 8.6 percent. The state is bordered by three states with unemployment ranging from 4.2 to 6.9 percent and minimum wages at $7.25 an hour. Governor Quinn's proposal would set the new minimum wage at $10, up from $8.25.

State Sen. Darrin LaHood, R-Peoria, worries that raising the minimum wage will only exacerbate the state's jobs deficiency.

"We are already a dollar above the federal minimum wage,” LaHood said. “When that was raised three years ago we lost 200,000 jobs. So there is a direct correlation to raising the minimum wage - which we're already above the national average - and job loss."

LaHood continued, "When I talk to employers and businesspeople, people are leaving the state because of these policies. They want to live and work somewhere with lower personal and business taxes, fewer regulations and a lower minimum wage, and the states around us offer that."

State Sen. John Sullivan, D-Rushville, said the minimum wage is a strong policy point for his party but is wary of the effect raising it could have on the struggling economy.

"Our unemployment in the state is stubbornly high and not coming down. I don't know that increasing the minimum wage is going to help that issue,” Sullivan said. “The minimum wage is already lower in Missouri and Iowa than it is in Illinois, and if we increase it again it's going to be even harder to keep those workers.”

State Rep. Mary Flowers, D-Chicago, doesn’t share that view, arguing that Quinn's proposal doesn't go high enough.

"If we're going to raise it, I'd rather we raised it to where it really should be: $15 or $17 an hour,” she said. “If you look at the price of everything else, it's gone up far more than the minimum wage ever has. We have single mothers working three jobs trying to make ends meet - to pay for food, gas, college, you name it - when really they should be working one job and spending more time at home with their kids.”

Flowers said that the state has an obligation to raise the wages if businesses won't do it on their own.

"It would be great if each business doubled what it paid its workers, then the workers could actually afford to purchase the same things they're selling,” she said. “But if businesses won't do it, the state has the responsibility to raise the minimum wage requirement."

State Sen. Dale Righter, R-Matoon, disagrees.

"The portrait the governor is trying to paint of what Illinois is or headed to be doesn't look very much like what people see in reality,” Righter said. “He seems to believe that you can build and sustain a middle class with minimum wage increases and government spending, and that's contrary to our experience not just here in Illinois, but across the country."

Mulkey said that a lower minimum wage would allow his restaurant to hire more people and noted an increase would hurt small businesses in particular.

"The bigger corporations can kind of grin and bear it, but in our case, it means making tough decisions about how many employees we can have and how much we can pay them,” Mulkey said. “Really, it's one of the worst ideas in a long time.”


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