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Wage increase plan raises ire from area businesses

Published: Thursday, March 21, 2013 5:30 a.m. CDT • Updated: Thursday, March 21, 2013 12:16 p.m. CDT
Caption
(Sarah Nader)
Sarah Nader - snader@shawmedia.com Mario Lopez of Crystal Lake washes dishes Wednesday while working at the Village Squire in Crystal Lake. Lopez has been a busboy at the restaurant for the past four months.

Recent calls to raise the minimum wage in Illinois received a mixed reaction from McHenry County businesses, as special interests on both sides of the issue prepare for a looming wage debate in Springfield.

Local business groups, such as the McHenry Chamber of Commerce, argued that any increase in the minimum wage would slow economic growth and force small businesses in particular to cut back on staff hours and new hires to conserve costs.

But at least one local owner said he welcomes higher pay for his low-income workers. George Karas, who owns Village Squire restaurants in Crystal Lake and McHenry, said the benefit of increased worker productivity outweighs any potential damage to his personnel budget.

“By raising the minimum wage, I would raise my expectations for them in making this a better place for customers,” Karas said. “Minimum wage equals minimum service. That’s how I see it.”

Karas admitted that his position puts him in the minority among his fellow business owners, who traditionally resist minimum wage increases that would saddle them with more expenses.

Statewide business groups such as the Illinois Chamber of Commerce and the Illinois Retail Merchants Association immediately denounced Gov. Pat Quinn’s call last month to raise the state’s minimum wage from $8.25 an hour to at least $10 an hour during the next four years.

Since then, state Sen. Kimberly Lightford, D-Chicago, has started negotiating a bill that would achieve Quinn’s call for a double-digit minimum wage.

Illinois already has one of the highest minimum wage rates in the nation, ranking fourth behind Vermont, Oregon and Washington.

But Kimberly Drew, a policy associate for the Chicago-based Heartland Alliance, said that a minimum wage of at least a $10 an hour would help low-income earners keep pace with accelerating costs for food, housing and transportation.

The alliance, which aims to eradicate poverty in the Midwest, estimated that a full-time minimum wage worker in Illinois earns $17,000 a year, and most of those workers (84.2 percent) are older than 20.

“The reality is that workers can’t survive or support themselves adequately on a minimum wage job anymore,” Drew said. “We believe no one who works full time for a living should be living in poverty.”

The alliance has been working with Lightford on a minimum wage bill that could be debated in the Statehouse by May. The retail merchants association also has been contacting the Chicago senator about the bill’s adverse effects on retailers, Vice President Tanya Triche said.

A minimum wage hike would put the state at a competitive disadvantage to border businesses in Midwestern states with lower minimum wage rates, such as Wisconsin, Indiana, Iowa and Missouri.

A rate increase also would squeeze businesses already grappling with increased costs from the federal health care overhaul and tight profit margins from the slow economy, she said.

“Increasing the minimum wage at this point is a job killer in this state,” Triche said. “When there are more plentiful times, the conversation may be different. But we aren’t in those plentiful times.”

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