Chicago to Propose $15 Per Hour Minimum Wage Hike - Free Enterprise
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Chicago to Propose $15 Per Hour Minimum Wage Hike

Chicago has joined a handful of cities in proposing to raise the minimum wage to $15 per hour.

A group of aldermen in the Windy City have put forward a plan to raise the city's minimum wage from $8.25 an hour to $15 an hour, reports Reuters. This plan is separate from Mayor Rahm Emanuel's panel which has been tasked with providing recommendations for raising minimum wage.

What does this minimum wage proposal mean for Chicago employers?

Wage Increases a Growing Trend

Chicago, as with all other cities, can choose to set minimum wage as high as it pleases. A city can also lower minimum wage (although that may be politically caustic) to any number at or above the state minimum.

A handful of states choose not to establish a minimum wage or have one higher than the federal rate. In those states, most employees are entitled to at least $7.25 per hour, which is the current federal minimum wage. Small business employers may be exempt from paying the federal minimum wage depending on their industry or size.

In many expensive cities, like Chicago, employees have complained the state or federal minimum wage is insufficient to make a "living wage." Seattle, whose home state currently boasts a minimum wage of $9.19 per hour, is currently considering a similar move to $15 per hour, reports The Associated Press.

Two Separate Tracks

According to Crain's Chicago Business, under the proposed Chicago ordinance, companies in the city would be placed into two categories:

  • $50 million in annual revenue. These employers will begin paying a minimum of $12.50 per hour after the ordinance passes and $15 per hour within a year.
  • Less than $50 million. These smaller businesses would be able to phase in the $15 per hour hike over several years.

Employers worried about this proposal crippling their businesses may be interested in studies which suggest that higher wages will actually stimulate the city's economy. The Center for Popular Democracy and Raise Chicago issued a report last week arguing that a higher minimum wage would generate 5,350 new jobs as well as $616 million in "new economic activity."

Many small business owners may not have proposed wage increases in their home cities and states, but the struggle over minimum wage increases nationally is far from over.

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