At a subject matter hearing last week before the Illinois Senate, workers and advocates spoke about the great need for an increase in the state minimum wage (currently at $8.25 an hour) and access to paid sick days. Minimum wage worker Gloria Davis gave an account of the difficulties she faces subsisting on such a low wage, and home care worker Gail Hamilton spoke of her need for paid sick days, mainly so as not to put her clients at risk if she is ill. Restaurant owner Mark Forinash told Senators that paying his workers far above the minimum wage and providing access to benefits increases worker productivity and is a determining factor in the success of his business.
Opponents, including a business owner, a spokesperson from the Illinois Retail Merchants Association, and representatives from the Illinois and Chicagoland Chamber of Commerce, argued that these reforms would be serious job killers that would cause a reduction in employee hours and benefits and ultimately business closures.
While these are certainly not new refrains, they have gained traction among opponents despite their inaccuracies. In 2013 the Center for Economic and Policy Research concluded that increases in the minimum wage often have little to no impact on employment levels for low-wage workers. Generally, employers are able to shift or cut costs without dismissing employees, and they often see cost savings through reduced turnover and increased productivity. Moreover, the small increase in costs resulting from a raise in the minimum wage typically represents a modest portion of expenses for businesses. Municipal-level projections echo this conclusion. San Francisco recently voted to raise its minimum wage to $15 by 2018, and a study conducted by University of California, Berkeley projected increases in operating costs to be only 0.2% for retailers and 3.0% for restaurants.
Paid sick days can also lead to reduced turnover and increased productivity. It is estimated that the decreased productivity when employees work while sick costs the national economy $160 billion each year. While the opponents testifying before the Illinois Senate claimed that paid sick days will surely lead to job loss, evidence from Connecticut, the first state to enact paid sick days, suggests otherwise. Since the law’s implementation, few employers in Connecticut have made reductions in employee hours and the industry most affected by the law—leisure and hospitality—has actually seen job growth in recent years.
The fate of an increase in the state minimum wage and enactment of paid sick days is unclear. The Shriver Center and its coalition partners remain hopeful that a paid sick days bill will pass the Illinois General Assembly this year along with a minimum wage increase to $11 (phased in over three years) with no strings attached–no language that would prevent local governments from enacting their own minimum wage laws, as Chicago has done, or providing tax credits to businesses that pay low wages, which incentivizes paying low wages and could devastate Illinois’s already precarious budget situation.