On July 1, Illinois hiked its minimum wage by 25 cents to $8.25 an hour, which is $1 above the federal minimum and higher than our neighboring states. When state Sen. Bill Brady, the Republican candidate for governor, suggested this was a bad idea, Gov. Pat Quinn had a field day. Easy pickings for Quinn: Brady’s looking out for the bosses, I’m looking out for the working people.
How about a reality check?
The higher minimum wage in Illinois will keep some people from finding jobs because there will be fewer jobs to find.
It’s not as if the research on this is just now trickling in. When you raise the price of labor, guess what happens? Employers don’t buy as much of it. Raise it too high for market conditions and ignore competition along the border, and the pain increases.
In 2008, respected economists David Neumark and William Wascher reviewed the evidence from decades of studies on the impact of minimum wage rules. They found that when governments raise minimum wages, they mainly reduce employment opportunities for low-skilled and poor workers. The damage primarily is focused on the most vulnerable workers, though employers can get put at a disadvantage too.
Arguments in favor of raising the minimum wage gloss over that central issue. There will be fewer jobs.
The argument is offered that every job in Illinois should comfortably support a family. But the minimum wage mainly goes to teenagers and to people who are working part-time for extra cash. Many minimum-wage earners graduate to higher pay and greater working hours, having been given the chance to show they are reliable and productive. But if no job exists, they don’t get that chance to prove themselves.
Supporters say that a higher minimum wage translates into a more diligent and efficient work force. But employers are in a much better position than politicians to determine what best motivates their employees. Does an extra 25 cents per hour do the trick for some workers? If it did, employers would pay it.
Brady suggested that Illinois reduce its minimum wage to the federal level, to make the state more competitive. He backed off, burned by the quick and easy shots that Quinn took. Lowering the minimum wage is not an easy argument to sell — especially not in a political campaign. But if the goal is to put more Illinoisans to work — can we assume that’s the goal, Gov. Quinn? — then Brady is on the more defensible track.
A lot of Illinoisans are out of work. Keep in mind, when you’re out of work your minimum wage isn’t $8.25. It’s $0.00.
