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Cook County poised to adopt $13 hourly minimum wage affecting suburbs

Wednesday, October 26, 2016
Chicago Tribune
by Alexia Elejalde-Ruiz

Cook County poised to adopt $13 hourly minimum wage affecting suburbs

Alexia Elejalde-RuizContact ReporterChicago Tribune

Suburban Cook County is poised to join Chicago in adopting a $13 hourly minimum wage, a move critics say is better left to the state but proponents contend is a response to the state's inaction.

The Cook County Board of Commissioners is expected to pass an ordinance Wednesday that would gradually raise the minimum wage to $13 by July 2020, following its approval by the board's legislative and intergovernmental affairs committee Tuesday.

The move comes just over a year after Chicago implemented the first phase of a minimum wage increase, and could add Cook County to the growing list of government bodies seeking to help lift people out of poverty by raising the wages of the lowest-paid workers.

Chairman John Daley, D-Chicago, a sponsor of the legislation, called the ordinance "the moral and right thing to do" and questioned whether any of the commissioners or their families could live on the state's minimum wage of $8.25 an hour.

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The first increase, to $10 an hour, would take effect July 1, 2017. The wage would rise to $11 a year later and to $12 in July 2019. It hits $13 an hour in 2020, and subsequent annual increases would be at the rate of inflation, not to exceed 2.5 percent.

The law also raises the tipped wage by 50 cents, to $4.95 come July and eventually to $5.95 an hour.

The suburbs would be a year behind the city, which will reach $13 an hour by July 2019.

The law would apply to the entire county, including unincorporated areas. Home-rule towns, however, could vote to opt out of the increase, though that could exacerbate the patchwork of laws that critics say creates an uneven playing field between competing businesses in neighboring towns, said Mike Reever, vice president of government relations at the Chicagoland Chamber of Commerce, which opposes the county ordinance.

Business owners cope as Chicago's minimum wage creeps higher

Several trade groups representing the retail and restaurant industries oppose the measure, saying businesses operating on 3 to 5 percent profit margins already are squeezed by a battery of cost increases. Among them are a federal rule extending overtime pay to millions more Americans that takes effect Dec. 1, and new city and county laws requiring all employers offer paid sick leave, beginning July 1.

Sam Toia, executive director of the Illinois Restaurant Association, said he supports a statewide minimum wage increase to $11 an hour, but worries a county-specific law puts businesses at a disadvantage against their competitors across the county line.

"Our businesses don't operate on an island," Toia said.

Commissioner Larry Suffredin, D-Evanston, lead sponsor of the proposal, said the goal is for the state to pass a minimum wage law, but a proposal put forth by Sen. Kimberly Lightford, D-Maywood, has languished since 2009. The intention is to encourage the state to move forward.

Chicago's minimum wage increase attracting workers to city

"My hope is that the General Assembly will pass something to negate all this," Suffredin said.

A long line of workers, most of them part of a grass-roots membership organization called People's Lobby that advocates for income and racial equality, told personal stories of juggling multiple low-wage jobs to try to make ends meet.

Daniel LaSpata, 35, said he lost his job as a community organizer at a nonprofit during the Great Recession and felt lucky to land a position at Barnes & Noble several weeks later, but the $8.50-an-hour wage left him unable to afford rent. He slept on a friend's futon, walked miles to work to save on transportation costs and sold his plasma for extra cash.

Shifts in the labor market are increasing the ranks of low-wage service workers who are not moving out of those jobs as they did in the past, said Commissioner Bridget Gainer, D-Chicago, one of 12 commissioners who voted in favor of the measure.

Melissa Hill, head of government relations at Jewel-Osco, said the company already has felt the effects of the city's minimum-wage increase at its 35 Chicago stores, and it worries about the impact on its 92 stores in suburban Cook County.

Wage costs jumped 35 percent in the first year after the city's minimum wage went into effect, and 15 percent in the second year of the phase-in, far higher than anticipated, Hill said. As a result, the company hired 5 percent fewer employees the year after the city's law went into effect compared to the prior year. Despite assertions that better pay leads to better retention, employee turnover has not improved, she said.

Employers from the nonprofit sector also expressed concern.

Steve Manning, executive director of Park Lawn, a nonprofit in Oak Lawn that serves people with developmental disabilities, said his organization "will cease to exist in a couple of years" if it has to increase employees' pay significantly without increased reimbursements from the state.

Commissioner Sean Morrison, R-Palos Park, one of three commissioners to vote against the measure, questioned the legality of the county's ordinance and urged his peers to leave the matter to the state. But, knowing that the law had the support of the majority, he asked nonprofits be excluded.

"If we are going to kill the business folks let's at least not kill the nonprofits," Morrison said.

Suffredin expects to address the concerns of nonprofits before the July implementation.

Not all employers are opposed.

David Borris, co-founder of Hel's Kitchen, a catering company in Northbrook with 45 full-time employees and 80 part-time and seasonal workers, said he doesn't pay anyone less than $11 an hour and expects to pay them even more to stay well above the county minimum.

Raising wages may require bumping up prices but it is good for broad economic growth because the money circulates, he said.

"We're business owners, we're supposed to adapt and react and respond and come up with creative thinking of how we deal with this," Borris said.

Twitter @alexiaer

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