Minimum Wage Increases in Chicago

I hope you have heard the news: this week the Mayor and City Council members voted to increase the minimum wage to $13 per hour by 2019. I initially advocated for $15 per hour but the votes were not available to get that pay rate passed. The Minimum Wage Working Group was tasked with researching and proposing an effective minimum wage increase.  That research led to the increase to $13 per hour. Thiswage will increase earnings for 36% of Chicago workers, boost the local economy by more than $860 million, and lift roughly 70,000 Chicagoans out of poverty, including more than 5,000 single mothers. Though the decision to increase the minimum wage was sometimes hotly debated, I think the move to increase it in various phases over time will move our city in the right direction.

The minimum wage increase will be phased in over the next several years to allow businesses to adjust and to minimize disruptions to our local economy. Phasing in the minimum wage increase will result in minimal annual increases in expenses for business owners, ranging from approximately 0.1 to 1.5% each year. In July of 2015, the City's minimum wage will be increased to $10.00/hour, and will see increases of $0.50 in 2016 and 2017. In 2018, the minimum wage will see an increase of $1, bringing the wage to $12/hour. Finally, in 2019, the minimum wage will increase by $1 again, bringing it to the desired $13/hour. After 2019, the wage increases will be tied to inflation and the Consumer Price Index, with a maximum increase of 2.5% per year.

I want you to know and remember both Federal and State minimum wage laws set exceptions for certain employees that are not subject to the minimum wage ordinance. You should also know the city's ordinance has to be subject to those exceptions. Other exceptions include Subsidized Temporary Youth Employment Programs and Subsidized Transitional Employment Programs. The wages associated with these exceptions are lower than the City of Chicago minimum wage rate even if someone is employed in the city limits. 

The cost of living in the City of Chicago is high, which makes it very difficult for those who are relying on minimum wage jobs to live above poverty.  Historically, people have spent an average of 21% of their income on rent; now, this number has risen to 31%, meaning that nearly a third of Chicagoans' paycheck is used to pay for rent. For those working minimum wage jobs, the cost of shelter is extraordinarily high compared to their incomes.

I've continually advocated for an increase in the minimum wage, and glad to see "we are getting things done." As an elected official in the City of Chicago I am proud to be part of a decision that will boost the standard of living for those who are employed and will provide a pathway out of poverty. While this increase may not be the $15 per hour I and other advocates have been hoping for, we should still consider this a victory and a step forward, for now.  

Posted on December 6, 2014 .