Chicago would raise its minimum wage and tie future increases to the cost-of-living under a mayoral plan in the works to address the vexing problem of income inequality.
Tired of waiting for the state and federal governments to act, Mayor Rahm Emanuel on Monday asked seventeen business, labor, civic and political leaders to confront the issue head-on and draft a Chicago-only plan within 45 days.
The panel will be co-chaired by South Side Ald. Will Burns (4th) and by John Bourman, president of the Sergent Shriver Center on Poverty Law.
Members include representatives from business diametrically opposed to the idea as well as labor champions of a Chicago increase. The group will hold its first meeting May 28, then set up a schedule of public hearings across the city.
“The mayor believes Chicago workers deserve a living wage and feels we’ve waited for a very long time for the state and federal government to act. But, we have to do it in a way that’s responsible to small business,” David Spielfogel, a senior adviser to the mayor, said Monday.
“There are plenty of studies out there that show a strong minimum wage is actually beneficial to small business and the economy. In order to keep Chicago competitive, we need to be sure everyone has a shot at the middle-class…The mayor wants to see the minimum wage increased and eventually tied to inflation so it doesn’t become a political football every ten years.”
The minimum wage currently stands at $7.25-an-hour at the federal level and $8.25 in Illinois.
Gov. Pat Quinn wants to raise the state’s minimum wage to $10.65-an-hour, in part, to capitalize on Republican gubernatorial candidate Bruce Rauner’s waffling on the issue.
House Speaker Michael Madigan (D-Chicago) is trying to push through an advisory referendum that would ask voters who go to the polls in November whether the state’s minimum wage should be increased to $10-an-hour.
Burns said the goal of the Chicago panel is to find a way to lift up the city’s lowest-paid employees “over time” without serving as a disincentive to business.
“Wages have not gone up for most people since the Great Recession. Workers who found jobs ended up making less. We want to look at a minimum wage that would be appropriate for Chicago, help move more people out of poverty and help reduce income inequality. That’s why you have to have business at the table—so they can partner with us in figuring this out,” the alderman said.
“The goal here is to have…a process by which business, labor, civic organizations and aldermen figure what the city’s minimum wage should be, what workers should be impacted by it and how to implement it over time.”
Burns pointed to the “income inequality commission” in Seattle that culminated in Mayor Ed Murray’s plan to raise the minimum wage to $15-an-hour, among of the highest in the nation.
The Seattle plan would give businesses with fewer than 500 employees seven years to comply and larger businesses three years. After that, increases would be tied to inflation.
“They came up with a way to increase the minimum wage for the lowest-paid workers with business at the table. We can do the same here….based on the size of the company, what contributions they make to health care and do it over time,” Burns said.
In 2006, the City Council voted 35-to-14 to require Wal-Mart and other “big box” retailing giants to pay their employees at least $13-an-hour in wages and benefits by 2010.
Six weeks later, then Mayor Richard M. Daley killed the ordinance spawned by Wal-Mart’s entry into the Chicago market with his first-ever veto and made it stick by winning three crossover votes. That prompted organized labor to spend millions to elect a more union-friendly Council.
Now, Emanuel is leading the charge for a Chicago-only ordinance that would resurrect some of the same anti-business claims. It comes on the heels of a partial ban on plastic bags that, the Il. Retail Merchants Association has argued, would also raise business costs.
“A Chicago-only increase in minimum wages will have a direct cost to jobs and a direct effect on the number of hours worked by employees at a time when Chicago has a very high unemployment rate. In certain areas of the city, the unemployment rate nears 20 percent,” said Tanya Triche, vice-president and general counsel of the Il. Retail Merchants Association.
“We would much rather have a conversation with the city about how to increase employment opportunities so more people can work instead of talking about a policy that will cost jobs. A city-specific ordinance on the heels of the plastic bag issue will have a direct impact on costs, especially on grocers. Aldermen who have border wards are already seeing businesses set up shop right outside their wards. This is yet another policy that will make it even more difficult to attract business on this side of the border.”
Although the timing of Emanuel’s lastest move appears to be political, championing the minimum wage issue is nothing new for the mayor.
As chairman of the Democratic Congressional Campaign Committee (DCC) during the 2006 elections, Emanuel made a federal minimum wage increase part of the a so-called “100-hour Plan” of legislation to be enacted within the first 100 hours of a Democratic Congress.
He then worked with Speaker Nancy Pelosi to pass the Fair Minimum Wage Act of 2007 out of the House within the first week of the new Democratic majority. This bill increased the minimum wage by 40 percent, from $5.15 to $7.25 an hour, the first increase in more than a decade.
Besides Bourman and Burns, the other group members include: Deborah Bennett, senior program officer, Polk Bros. Foundation; Matt Brandon, SEIU Local 73; Ald. Walter Burnett (27th); Sol Flores, executive director, La Casa Norte; Theresa Mintle, CEO, Chicagoland Chamber of Commerce; Ald. Emma Mitts (37th); Ald. Joe Moore (49th); Ald. Ameya Pawar (47th); Maria Pesqueira, Mujeres Latinas en Accion; Ald. Ariel Reboyras (30th); Sam Toia, president, Illinois Restaurant Association; Andrea Zopp, president and CEO, Chicago Urban League; Tanya Triche, IRMA.