As minimum wage adjusts, businesses bristle

The minimum wage in Illinois reaches $8 per hour starting today, and business leaders across the suburbs continue to view the automatic increases as detrimental to their companies - though some older workers say the boost is needed.

While Illinois has a minimum wage that is higher than the federal minimum, neighboring states, including Wisconsin, have a minimum that is lower than the federal rate. That is difficult for suburban businesses to accept, said Jim Uszler, executive director of the Mount Prospect Chamber of Commerce.

"It makes it difficult to stay competitive and stay in business," said Uszler. "We opposed the legislation when it was drafted and voted upon, but the state legislators did not listen to us. Now that we are in a difficult economy and businesses are struggling just to pay property taxes, this wage increase is not going to be easy to swallow."

Minimum wage, long the staple among teens or young adults entering the work force and seniors looking to supplement their incomes, continues to rise each year. It had been $7.75 since last year, grows to $8 starting today, and will reach $8.25 in July 2010, according to state law. The federal minimum wage will be $7.25 later in July.

The Naperville Area Chamber of Commerce also opposed the increase and saw it as another government mandate that raises the cost of doing business.

"The bigger question is the looming tax increase combined with all of the other costs and mandates that create a difficult business environment," said Naperville chamber President and CEO John Schmitt. "Illinois should look for ways to encourage and grow business instead of driving them to other states."

The Illinois Retail Merchants Association in Chicago also fought against the increases, saying it would have a domino effect on the employer's other labor-related expenses, including unemployment insurance, workman's compensation and Social Security, said Peter Gill, spokesman for the association with about 23,000 store members in Illinois.

"Overall, increasing the minimum wage increases an employer's payroll liabilities," Gill said. "It has a domino effect on everything else. And it doesn't encourage job growth."

However AARP, which already has seen more than half of its nationwide membership return to work, sees the increase as beneficial, said spokesman David Irwin.

"This helps most of our people, who are struggling through some difficult times right now," said Irwin. "Since the onset of the recession, most people who had planned a secure retirement are now returning to the work force."

A spokesman from Gov. Pat Quinn's office did not respond.