Following Historic Seattle Agreement, Chicago Becomes Next City to Consider $15 Minimum Wage

New report finds nearly 40% of workers in Chicago remain stuck in low-wage jobs paying less than $15 per hour

Chicago, IL – With recent polling showing record-high support for Seattle’s recent $15 minimum wage agreement, Chicago lawmakers will introduce on Wednesday a bill that would set the city on course to adopt a $15 minimum wage of its own. The bill introduction follows the release of a new analysis from the National Employment Law Project finding that over 500,000 workers in Chicago – 38 percent of the city’s workforce – remain stuck in low-wage jobs that pay less than $15 per hour.

Voters in Chicago have expressed overwhelming support for raising the minimum wage this year: on March 18th, 87 percent of voters in the city backed raising the minimum wage to $15 in a non-binding advisory referendum. Following this vote, Mayor Rahm Emmanuel announced this month the creation of a task force to study an increase in the city’s minimum wage and make recommendations.  San Francisco, Los Angeles and New York are also considering $15 minimum wages.

The NELP report, analyzing U.S. Census Bureau data, finds that disproportionate numbers of female, black, and Hispanic workers in Chicago earn less than $15 per hour. Low-wage jobs pose a particular problem for working families in the city, with nearly half (48 percent) of all working single parents in Chicago earning less than $15 per hour.

“Chicago desperately needs more living wage jobs and raising the minimum wage substantially is the most direct step the City Council can take to boost pay across the bottom of the economy and put more money in the pockets of the city’s workforce,” said Paul Sonn, general counsel at the National Employment Law Project. “As the recent agreement in Seattle makes clear, a minimum wage increase to $15 per hour is not just an economic priority, but also a realistic policy that businesses and workers alike can come together to support.”

A growing number of localities across the country have already enacted minimum wages significantly above the federal and state level in an effort to address rising poverty and the economy’s shift towards low-paying jobs – a trend that as a recent NELP report documented has worsened during the post-recession recovery.  Cities and counties that have enacted higher minimum wages in recent years include San Francisco ($10.74 per hour), Santa Fe ($10.66 per hour), San Jose ($10.15 per hour), Washington, DC ($11.50 by 2016), Montgomery County, MD ($11.50 by 2017), Prince George’s County, MD ($11.50 by 2017), and SeaTac, WA ($15).

In addition to Chicago, other cities that are pursuing higher minimum wages currently include San Diego, Oakland, the District of Columbia, Portland (ME), Davis (CA), and Las Cruces (NM).

A 2011 study of citywide minimum wage increases by the Center for Economic and Policy Research, the most extensive to date, examined minimum wage increases passed in Santa Fe, San Francisco, and Washington, D.C., and found that wages rose significantly for low-paid workers in fast-food, food services, retail, and other low-wage establishments in the years after each increase took effect, without causing any significant change in total employment levels.

A 2014 book-length study of San Francisco’s minimum wage, health care, and paid sick leave laws, which collectively raised the compensation of low-wage workers to 80 percent above the federal minimum wage, found that these laws raised pay without costing jobs. From 2004 to 2011, private sector employment grew by 5.6 percent in San Francisco, but fell by 4.4 percent in other Bay Area counties that did not have a higher local wage. Among food service workers, who are more likely to be affected by minimum wage laws, employment grew 17.7 percent in San Francisco, faster than in other Bay Area counties.

The most rigorous economic research over the past 20 years shows that raising the minimum wage boosts worker pay without causing job losses – even in regions where the economy is weak or unemployment is high.  As summarized recently in a statement by 600 economists, including seven Nobel Laureates and eight past presidents of the American Economic Association, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”

Emma Stieglitz
(646) 200-5307

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