Behind the numbers on the minimum wage

Community groups are keeping up the pressure to raise the minimum wage. [Photo by William Camargo]

Community groups are keeping up the pressure to raise the minimum wage. [Photo by William Camargo]

Hundreds of thousands of Chicagoans earn the minimum wage or slightly higher.  They struggle to pay rent and often have to choose between buying food and paying bills on time.  They rely heavily on public subsidies — food stamps, rental assistance, Medicaid — in effect, a taxpayer subsidy to the large corporations that often pay the lowest wages.

Some people — a lot of people — support raising the minimum wage.  On Election Day, the referendum calling for a raise was more popular than any politician, getting almost 2.2 million votes, more than 66 percent of the total, compared to almost 1.8 million for Rauner.  Indeed, hundreds of thousands of Governor-elect Bruce Rauner voters backed the referendum.

Some people — a small number of people — see the minimum wage as a political football and an issue to gin up voter turnout, construct a more populist profile or embarrass an opponent.

These three forces will be in play in the coming weeks as efforts to raise the state’s minimum wage and establish a higher wage in Chicago unfold.

Raising the minimum wage was essentially Gov. Pat Quinn’s only campaign issue.  That seemed to make sense, given Rauner’s various positions on the issue, first calling for eliminating the state minimum, then supporting a raise only conditionally.  But it didn’t work for Quinn, perhaps because he’d been governor with strong Democratic majorities in the legislature for six years.

Quinn now wants to push through a raise to $10.65 in the veto session.  But despite the huge “yes” vote in the referendum, it’s not yet clear that legislative leadership is entirely on board.

Progress Illinois recently interviewed political science professors who thought the Democrats in the General Assembly might wait until the next legislative session to pass an increase in order to put Rauner on the spot.

More tellingly, asked about a minimum-wage hike on “Chicago Tonight” last week, State Rep. Elaine Nekritz (57th District) said, “I don’t anticipate that it will pass” in the veto session.  Nekritz is an intimate of House Speaker Michael Madigan, who wields a supermajority and decides what gets voted on.  She didn’t respond to a request for clarification.

It was Madigan who put the referendum on the ballot.  It would be pretty cynical to drop the matter after it had served its purpose of rallying voters.  No wonder Democrats have problems.

The momentum for a raise may well be more than Madigan can manage, however.  Hundreds of neighborhood residents marched in support of action on the minimum wage and other issues Tuesday, led by the Take Back Chicago Coalition.  And the statewide coalition Raise Illinois has been lining up legislators and expects a concerted push for action on their part — as well as grassroots actions across the state — in coming days, on behalf of what they’re calling “an overwhelming bipartisan mandate.”

Meanwhile, the City Council is considering competing proposals for a citywide minimum.  An ordinance introduced in May by progressive aldermen would raise the minimum wage to $15 within a year for companies with revenues higher than $50 million, with smaller businesses stepping up to that level over four years.  An ordinance backed by Mayor Emanuel would increase the rate to $13 over three-and-a-half years.  Both would then peg the minimum wage to inflation.

A third proposal, submitted by Emanuel floor leader Pat O’Connor (40th Ward) and Tom Tunney (44th) would raise the minimum to $10.10 an hour by 2017, and leave it there.

Approval for Emanuel’s ordinance might be expected of the rubber-stamp council.  After three-and-a-half years of outsourcing city jobs and ignoring proposals to help airport workers and cab drivers, the mayor has apparently awakened to the problem of income inequality, at least as an issue in the upcoming mayoral race.

But labor and community groups representing low-wage workers are keeping up the pressure for a more comprehensive approach.  They point to a new report from the Center for Popular Democracy, which compares the $15 and $13 proposals and calls Emanuel’s ordinance “too little, too late.” (More on that here.)

Emanuel’s ordinance would leave out 100,000 Chicago workers — mainly black and Latino — who earn between $13 and $15 an hour, as well as another 90,000 who earn up to $17.30 and might expect an “indirect raise” with the higher rate, according to the report.

A Chicagoan working full-time at $13 an hour spends 92 percent of his income on housing, food and transportation, the report estimated.  A $13-an-hour worker with an apartment at the city’s median rent level pays 46 percent of her income on housing; a $15-an-hour worker pays 35 percent.

Considering both the numbers of workers involved and the different ramp-up periods, the difference in impact is dramatic, according to the report.  The $15 ordinance would generate $2.5 billion in new gross wages, $1 billion in new economic activity, $80 million in additional sales tax revenue for the city and $125 million in additional state income tax revenue.  The impact of the $13 proposal in all those areas would be roughly half as big.

And those figures don’t include large groups of workers left out of the mayor’s ordinance.  For tipped workers, Emanuel proposes a $1.50 increase over the state’s tipped minimum, or about $6.45 an hour.  The $15 ordinance would raise their rate to 70 percent of the city’s minimum wage, or $10.50 an hour.

In addition, the Emanuel ordinance follows state law in excluding domestic workers from coverage.  Tens of thousands of nannies and housekeepers are covered only by the lower federal minimum.  The progressive aldermen’s ordinance would include those workers; Emanuel’s wouldn’t.

Once again, it’s a workforce that is predominantly female, black, Latino and immigrant that is left out.

Email Curtis Black at cblack.tcr@gmail.com       

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