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City Council raises Chicago’s minimum hourly wage to $13

Eight years ago, the City Council gave Wal-Mart and other “big box” stores four years to pay their employees $13 an hour in wages and benefits.

Then-Mayor Richard M. Daley killed the ordinance with his only veto and made it stick by winning three crossover votes. That prompted organized labor to spend millions to elect a more union-friendly Council.

On Tuesday, Mayor Rahm Emanuel led a stampede of aldermen in the opposite direction in a move that, if it sticks, could help Emanuel shed the “Mayor 1% label” and undercut the progressive base of his strongest challengers.

By a vote of 44-to-5, the City Council agreed to raise Chicago’s minimum wage to $13 an hour by 2019.

”No” votes were cast by Aldermen Matt O’Shea (19th); Brendan Reilly (42nd); Michele Smith (43rd); Tom Tunney (44th) and Mary O’Connor (41st).

Emanuel called the special City Council meeting amid concern that the Illinois General Assembly would approve a lesser, statewide increase — from $8.25 to $10 an hour — that prohibits Chicago from going higher.

But when Illinois House Speaker Michael Madigan ruled out legislation that ties Chicago’s hands, it became clear that the rush to approve a $13 an hour minimum wage is more about Emanuel’s race to the political left than it is about beating Springfield to the punch.

“It’s not about whether you go left or right. It’s whether you’re gonna move forward or not. And I’m gonna lay out specific ideas — about public safety, public education, city finances, job creation and investment in transportation — and people will judge that,” the mayor said after Tuesday’s vote.

“This has been frozen since 2007. You’ve had a series of elections beforehand. If it was only about elections, people would have done it for the 2008 election. They would have done it for the 2010 election. They would have done it for the 2012 election.”

But what was the rush if Madigan was determined to insulate the city?

“Last week, there were rising forces talking about not allowing the city to move. And if we had not moved, [Chicago] could have been locked in place and we would not see a minimum wage… reflective of the cost-of-living in Chicago,” he said.

“I wanted to make sure, given all of the work over the last eight months, [that] not only didn’t it go to waste but we . . . not let Springfield strip Chicago and working families of the raises that correspond to paying bills here in Chicago. Had we not acted … there’s a lot of forces that push back against an increase in the minimum wage.”

The mayor said he’s convinced the city’s home-rule authority allows Chicago to chart its own course.

Business groups are not so sure.

“There’s a question out there about whether the city has the authority to implement its own minimum wage set and apart from the state. I don’t know that that question has necessarily been answered by the courts yet. And it’s certainly worth looking into,” said Tanya Triche, vice president and general counsel for the Illinois Retail Merchants Association.

Reilly agreed, adding, “There was some question raised about the legality of [Tuesday’s] City Council meeting — whether it was properly noticed. There are also questions about the city’s authority to actually do this at all.”

Tuesday’s debate began with Tunney, owner of Ann Sather Restaurants, attempting to use a parliamentary maneuver to defer consideration of the mayor’s plan.

Emanuel ruled the motion out of order on grounds that minor tweaks that included covering domestic workers made the substitute ordinance a “direct introduction” that cannot be deferred.

That left Tunney to denounce the increase on the City Council floor.

He argued for a lesser increase that would create a level playing field statewide — not a dramatically higher increase in Chicago that would put small businesses struggling to stay alive amid increased competition from the Internet at a competitive disadvantage.

“Whatever the entry-level wage is, when there is no company, there is no job,” Tunney warned.

“How do you go from $8.25 [an hour] to $13 overnight? You know what you do? You raise the prices and you’ve also got to find ways to do it with less help. That’s what’s going to happen.”

Tunney also fired back against those who attempted to frame Tuesday’s debate as a fight between corporate honchos raking in millions and the “little guy” who got the shaft.

“These are not financial traders, folks. These are people that get up at 3 in the morning to make their businesses happen. You know how many hours they work? Ask `em. They work 60 or 70 hours a week. And some years, they don’t get paid,” Tunney said.

O’Connor, whose Far Northwest Side ward borders nine suburbs, also predicted “unintended consequences” ranging from more “vacant storefronts” to fewer jobs and shorter hours for those employees fortunate enough to be retained.

Reilly argued that the income disparity debate is not “good vs. evil or Tiny Tim vs. Ebeneezer Scrooge.” It’s a matter of how much and how soon to raise the minimum wage and where the increase should apply.

“We need to provide a livable wage for those who need it most. But you have to remember the cost that comes with these policies,” he said.

But even Ald. Bob Fioretti (2nd), a mayoral challenger, went along with Emanuel’s plan while vowing to continue the fight for a $15 an hour minimum wage that, if paid by large corporations alone, would benefit another 510,000 working Chicagoans.

Referring to the $13-an-hour plan, Fioretti said, “It is a good, positive first step. It’s a first step on the road to give workers the dignity that they deserve. It keeps wages for those same workers, though, just pennies above the poverty line in 2019. In order to be truly a world-class city . . . we must continue the fight for 15.”

Still, Fioretti was not about to look a gift horse in the mouth.

“For too long, too many working people have struggled simply to survive here. Some are working two and even three jobs. . . . Some have to choose between basic necessities — like medicine and rent. Some have to choose between keeping the electricity running or the pantry stocked. Meanwhile, many of our large corporations are raking in millions,” he said.

Ald. Howard Brookins (21st), chairman of the City Council’s Black Caucus, added, “People who own McDonald’s have cried to all of us. But how do you cry for a millionaire? And it’s not just, ‘Business is gonna run to the suburbs.’ The suburbs are eventually gonna raise their wages to compete. . . . How can the same McDonald’s with the same structure paying a higher tax rate than the city of Chicago manage to pay their employees more than the piddly wages that are paid to employees in our communities? This disproportionately affects communities of color. It’s time to give those folks a raise.”

The mayor’s original ordinance would have increased Chicago’s minimum wage on June 1 to $9.50 an hour and raised it gradually to $13-an-hour by 2018.

The new version starts the increased wage at $10 an hour on July 1 and gives Chicago businesses an extra year to reach the $13 mark.

Hikes of 50 cents an hour would be imposed in 2016 and 2017. That would be followed by $1 increases in 2018 and 2019 and annual increases of either 2.5 percent or the rate of inflation, whichever is lower.

The hourly wage for tip workers would rise from $4.95-to-$5.95.

The only exception would be in years when the unemployment rate exceeds 8.5 percent. In those years, Chicago’s minimum wage would be frozen.

For a mayor who prides himself on having eliminated Chicago’s hated head tax and reduced bureaucratic red tape, the decision to champion a city minimum wage that is substantially higher than the state’s marks an abrupt shift.

It also shows how dramatically the political landscape has been altered by the nationwide campaign to bridge the income disparity gap in the eight years since the big-box minimum wage fight.

Mayoral challenger Jesus “Chuy” Garcia applauded the City Council for approving an increase that will provide “immediate relief” to more than 400,000 people “struggling to survive on low wages” and provide an $800 million jolt to the local economy.

But he questioned why Emanuel would “wait so long” to move.

“For a mayor who is fond of saying he makes tough decisions, we have a right to ask why he did not make an easy one. Why didn’t he support a minimum wage hike during his first year in office? Why does he want to wait another five years before raising everyone to $13 an hour? Rents, restaurant prices and the cost of groceries are not going to wait another five years to go up,” Garcia was quoted as saying in a statement.

“I continue to support a minimum wage increase that will bring low-wage workers up to $15 an hour. As mayor, I will pass legislation to do that my first year in office — not my last.”

The Chicagoland Chamber of Commerce, the Illiinois Hotel and Lodging Association, the Illinois Restaurant Association and the Illinois Retail Merchants Association are all dead-set against a Chicago-only increase.

They argued that it would force Chicago restaurants and retailers to compete for customers and employees against businesses in Calumet Park, Bridgeview, Cicero Elmwood Park, Lincolnwood and Park Ridge with a 57 percent labor cost advantage.

Their arguments fell on deaf ears among most Chicago aldermen, who seized on the rare chance to champion a wildly popular issue three months before facing the voters.

A non-binding referendum asking voters whether they favor a statewide minimum wage increase to $10 an hour was approved by 88 percent of Chicago voters.

For his part, Emanuel pointed to his political track record as evidence that he is not a Johnny-come-lately to the minimum wage issue. He noted that he’s been championing the cause for more than 20 years — ever since he was a brash young White House aide to then-President Bill Clinton.


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