Minimum wage in Chicago increased from $11 per hour to $12 per hour on July 1, but the pay raise still does little to help Chicagoans make a living wage, according to a new Metropolitan Planning Council analysis. In particular, African-American and Latino family households will continue to struggle to cover their basic living expenses.
The MPC’s analysis was based on 2016 U.S. census data provided by the University of Minnesota and the Massachusetts Institute of Technology’s living-wage standards for each of the 10 largest metro areas in the country.
A living wage is determined by being employed and receiving a sufficient income that can cover for housing, taxes, food, transportation, child care and other basic necessities. In 2016, about 70.5 percent of African-American-led households didn’t make a living wage in Chicago. Latino families fared slightly better, but not by much; 60 percent of Latino family households didn’t make a living wage in the metro Chicago area in 2016.
Alden Loury, the director of research and evaluation at MPC, believes the minimum wage increases are a step in the right direction but still don’t get far enough to assist with the current inequity facing African-Americans living in Chicago.
“It never hurts to make more money, and $11 to $12 is a sizable raise,” Loury said. “If you think 5 percent is a decent raise, this is better than that for minimum wage workers. However, the wages are just so low in terms of what actually people need to earn.”
MIT’s living wage calculator for metro Chicago indicates a single adult needs to make at least $13.05 per hour to make a living wage. If that adult has a child, the rate doubles, and they will need to make $26.27 per hour to make a living wage in metro Chicago to compensate for added expenses.
Although wage increases are always beneficial, as Loury pointed out, he also indicates access to jobs is just as important.
“The story of Chicago is mostly around work and inequity,” Loury said. “For African-Americans, it’s more of a disconnect from work. You have higher rates of unemployment, a higher percentage of households where there are no working adults.”
According to MPC, the black unemployment rate in Chicago was 10.8 percent in 2016. More striking is 37.1 percent of African-American-led family households didn’t have a working adult. The national unemployment rate across all demographics was on average 4.9 percent, according to the federal Bureau of Labor Statistics in 2016.
It is difficult for African-American families to earn a living wage if they aren’t earning any wages to begin with, the MPC analysis argues.
For Latino families, it wasn’t a disconnect from the workforce that puts them at a disadvantage, but it is the poor wages they receive overall.
“The minimum wage is so low in terms of what people need to earn, according to the MIT living wage standard in metro Chicago,” Loury said. “When the minimum wage was being discussed a few years back, it was right around the time of the ‘Fight for $15’ campaign. The city’s minimum wage will get to $15 per hour, but it can be almost a decade from now before it actually reaches that.”
In 2019, the minimum wage will receive another dollar increase, making it $13 per hour. After 2019, the minimum wage will increase at the local rate of inflation or 2.5 percent, whichever one is lower, according to the 2014 Chicago minimum wage ordinance.
“It would be 2024 or 2025 before it gets to $15 per hour, and by then the living wage would be much higher than it is now,” Loury said.
It was a long battle to get this ordinance passed, said Wendy Pollack of the Sargent Shriver Center on Poverty Law. The Sargent Shriver Center on Poverty Law was part of the efforts to pass the ordinance to raise the minimum wage in 2014.
“The biggest discussion we had with businesses was the amount we should raise the minimum wage to and over what period of time we could do that,” Pollack said. “Does it go far enough? No, but is it a good start and outcome? For sure.”
Pollack believes living wages are an important aspect to quality of life, but also is fighting for aspects other than wages.
“We need to do more, living wages are one thing,” Pollack said. “We are also working on getting workers paid sick days, a more fair week schedule so they can spend time with their family.”
Manny Ramos is a corps member in Report for America, a not-for-profit journalism program that aims to bolster Sun-Times coverage of issues affecting Chicago’s South and West Sides.