Minimum wage hike to impact manufacturers statewide

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The minimum wage is going up for adults in Illinois and Illinois manufacturers aren’t happy about it.

The Illinois Manufacturer’s Association released a statement saying raising the minimum wage to 15 dollars an hour will hurt downstate employers.

IMA officials said downstate economies will struggle to absorb the wage hike, which is set to go into effect over the next five years, but not everyone agrees.

Quincy University Finance Professor Mitch Ellison said manufacturers here aren’t feeling the impact, as many employees are already making more than minimum wage.

However, he said it does have the ability to impact the local economy in other ways.

“Whenever you impose a legislative increase in minimum wage, you get wage compression, which the people who are already at the higher wage kind of resent the fact that the other folks are being shoved up to theirs and they work for that over time,” Ellison said.

Ellison said often times, employees who find themselves at minimum wage when the bottom gets moved up will get raises to balance everything out, but the gap isn’t as big as it was before.

“I think in fast food, you’re going to see higher prices, because there’s no substitute,” Ellison said. “They’re not going to move their locations across the river, but the increase in minimum wage will be passed straight along to the consumer I believe. In fast food, in retail, and I think you’re going to see some substitution and automation.”

 

Kara Biernat

Kara Biernat

Kara Biernat is a MultiMedia Journalist for WGEM News.

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