Progress Illinois - May 27, 2014, by Ellyn Fortino - A proposal to hike Chicago's minimum wage to $15 an hour would not only be a boon for many low-wage workers but also the city's economy, according to a new report by the Center for Popular Democracy.

"Raising the minimum wage to $15 an hour would promote economic stability among Chicago workers, economic vitality in their neighborhoods and economic growth throughout this city," said Connie Razza, director of strategic research at the center, which works both locally and nationally to build "the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial and economic justice agenda."

The new report comes ahead of Wednesday's Chicago City Council meeting, during which aldermen with the Progressive Reform Caucus plan to introduce an ordinance for a citywide hourly minimum wage of $15 an hour. The ordinance was developed with members of Raise Chicago, a coalition of community and labor groups advocating for a higher hourly wage floor in the city. Chicago's current minimum wage is $8.25 an hour, the same as the base hourly wage in Illinois and $1 more than the federal level. 

Under the proposed ordinance, large companies in Chicago making at least $50 million annually would have one year to phase in a $15 minimum hourly wage, including for workers at their subsidiaries and franchise locations, according to Raise Chicago. Small and mid-sized businesses would have slightly more than five years to boost their employees' wages to $15 an hour.

The first phase of the proposed ordinance, which would apply to larger firms, would increase the wages for 22 percent of Chicago workers, or 229,000 people, according to the report. Phase one would generate nearly $1.5 billion in new gross wages annually, or $1.1 billion after deductions. During the first stage of the proposed ordinance, the higher employee wages would mean an estimated $616 million in new economic activity across the region, leading to the creation of 5,350 new jobs, the report showed. A $15 hourly wage for workers employed by large businesses in the city would also provide approximately $45 million in new sales tax revenue.

Increased wages for workers could also lower employee turnover costs for businesses, according to the report. Requiring Chicago employers with annual gross revenues of $50 million or greater to pay their workers at least $15 an hour would reduce labor turnover in the workforce by as much as 80 percent per year.

However, larger firms covered under the proposed ordinance could see their overall employer costs increase by up to 4 percent, according to the report's estimations. As a result, affected firms may raise consumer prices by about 2 percent. Such a price hike would translate into an $0.08 increase for a $4 hamburger, the report noted.

Ald. Roderick Sawyer (6th), who intends to co-sponsor the ordinance, said he expects about 10 out of the 50 Chicago aldermen to initially sign on to the legislation.

"The push then would be to get others to join with us in this cause, because it's important," the alderman said. "We should have talked about this many, many years ago, and had (the minimum wage) kept up with inflation, we might not be having this conversation right now. ... I'm hoping that our colleagues will see that this is not a job killer."

Sawyer said there is no specific date planned for when the proposal could go up for a full city council vote.

It is the alderman's hope that Chicago Mayor Rahm Emanuel's recently-formed minimum wage task force will consider the $15 minimum wage proposal. Emanuel has asked members on the diverse committee, chaired by Ald. Will Burns (4th) and the Sargent Shriver National Center on Poverty Law's President John Bouman, to craft a plan to increase the wages for hourly minimum wage and tipped workers in the city. 

"I understand the interest in forming this committee," Sawyer said. "I don't think it's necessary because a proposed ordinance is ready to be submitted tomorrow. But now that the committee has been talked about, this [$15 minimum wage ordinance] is the first thing they can look at."

Sawyer and other backers of a $15 minimum wage are "open to listening to any and all suggestions" about the proposed ordinance, the alderman said. Sawyer also noted that Chicagoans are in favor of a $15 minimum wage.

During the March primary election, Chicago voters overwhelming supported a non-binding ballot referendum to increase the city's minimum wage to $15 an hour for employees of companies with annual revenues over $50 million. The referendum appeared on the ballot in 103 city precincts, garnering support from 87 percent of voters.

Katelyn Johnson, executive director of Action Now, which is involved with the Raise Chicago campaign, said the city's strong public support of a $15 minimum wage is not surprising. 

"We know that people in this city are struggling," she stressed. "The current minimum wage in Illinois is only $8.25 an hour, and that's so low that the workers, and certainly those who are supporting families, simply cannot survive, oftentimes working two or three jobs just to make ends meet and make other major personal sacrifices for themselves and their families.

"The $15 an hour wage will correct that," Johnson added. "It will provide a path out of poverty for families and allow (workers) to meet their families' basic needs so they no longer have to rely on food stamps or other public assistance. And in addition, it will stimulate the city's economy."

A total of 900,000 people work in Chicago, and 329,000 of them make less than $15 an hour, according to the report. Blacks and Latinos are disproportionately represented among low-wage workers in the city. 

Blacks and Latinos make up 23.6 percent and 26.8 percent of the share of all Chicago workers, respectively. However, 28 percent of low-wage earners in the city are black and 42.4 percent are Latino. Low-wage workers who live in the city are concentrated in the Chicago neighborhoods of Austin, Avondale, Bridgeport and McKinley Park, among other areas. 

"This geographic concentration of residents earning low wages means that an increase in the minimum wage will offer larger benefits to certain neighborhoods, while also stimulating the citywide economy," the report reads.

Meanwhile, Chicago aldermen are up for re-election next year, and Sawyer said those who co-sponsor the $15 minimum wage ordinance might see more support from voters at the polls.

"I think in my community, (supporting a $15 an hour minimum wage) plays better. People that try to live off of minimum wage understand that it needs to be raised, so those [aldermen] that have people that can understand that will obviously fare better," Sawyer said. "Maybe some in more affluent wards, it many not play as well, but even those there can understand the economic impact."

People who "have more disposable income, they spend it," the alderman continued. "And if you have more disposable income and you spend it, that means the money is circulating in those individual communities. Sales taxes are paid. That means we can get more revenue to do things: Pay down debt, infrastructure improvements, capital improvements."

Over the next few months, Raise Chicago members and others plan to take part in a number of activities to build community support for a $15 Chicago minimum wage and "put pressure on elected officials to carry out the will of the people," Johnson said. 

When asked if Chicagoans can expect to see more public protests concerning the minimum wage, Johnson said, "We'll see."

Be sure to check back with Progress Illinois for our coverage of Wednesday's Chicago City Council meeting.

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