|Small Business Owners Balk at Illinois' New Minimum Wage
||Human Resources Management - Entrepreneurism
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proposal to raise the state’s minimum wage above federal levels
may stop small business owners from adding workers or worse. The proposal
raises the minimum wage from $5.15 to $6.50 over the next 18 months.
One small business owner said that the things for which he hired someone
at minimum wage either won’t get done or will be done by machine.
He feels he won’t hire people for $6.50 an hour with no skills or
Illinois will become the 12th state to increase the minimum wage above
the federally mandated level of $5.15 established in 1996.
About 450,000 workers, or 6% of the Illinois workforce, earn between $5.15
and $6.50 per hour and will benefit from the increase. About half of those
earn the current minimum wage. About 60% of the minimum and near-minimum
wage workers in Illinois are female. The average is 31. The industries most
affected where workers earn less than the proposed new wage include:
- 58% of restaurant workers
- 39%of gasoline service station attendants
- 34% of people working in movie theatres
- 32% of those working for grocery stores
The Illinois director of the National Federation of Independent Businesses feels increasing the minimum wage above federally mandated levels is bad policy because it will result in lost jobs. There is also a concern that it will increase pressure to raise all hourly wages within the state, though there is no evidence of a ripple effect in other states.
Explain how the federal minimum wage law works. You
will find information on it at the U.S. Department of Labor website.
Why are small business owners particularly concerned
by this new minimum wage?
Business Owners Balk at Illinois’ New Minimum Wage," Knight
Ridder/Tribune Business News, June 3, 2003.
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