The minimum wage in the state of Illinois is going up to $15 per hour by 2025. As most college students make minimum wage, it would be seen as a positive, but it may result in it being harder for students to find jobs.
The law, which Gov. J.B. Pritzker signed on Feb. 19, will first increase the minimum wage from $8.25 to $9.25 on Jan. 1, 2020 and then to $10 on July 1, 2020. The wage will rise by $1 each Jan. 1 until it reaches $15 in 2025.
The increased minimum wage may result in a decrease in employment, which is a basic economic principle. Kevin O’Brien, professor of economics, said the minimum wage is not new to his field of study.
“It is something economists have studied many times,” O’Brien said. “The basic story is if you increase wages, employment decreases.”
O’Brien said studies about other states and regions that have implemented a higher minimum wage are inconsistent on their findings.
“The studies are all over the place,” O’Brien said. “The general conclusion is that you don’t see the drop in employment that simple theory would predict.”
O’Brien said there is a drop in employment, just not as significant as economists would expect.
Despite studies in other areas showing there is not a drastic decrease in employment or increase of prices, O’Brien worries about how much the minimum wage will increase.
“I know we are going to take six years to get there, but it’s still a very large increase,” O’Brien said. “We are not just talking about going to $8.25 to $11 or $12. We’re talking about getting close to doubling it. That’s where I would be concerned. A lot of these studies have been about more incremental changes to the minimum wage.”
University president Gary Roberts said he is most worried about the impact the new law will have on working students.
“Where I’m really concerned and disappointed is that there is no provision in the bill for student workers,” Roberts said. “I don’t think there is any doubt that if we have to go forward and implement a $15-an-hour minimum wage for student workers, we will significantly cut our student work force.”
Nathan Thomas, vice president of student affairs, oversees a division that employs a large amount of students. He said the minimum wage increase will affect his staff.
“For us, it’s going to affect really the Markin Center, the most, which quickly trickles into the
Coliseum and conference services, because those areas are employing the most,” Thomas said.
Thomas said his office still wants to provide opportunities for students, even with increasing costs.
“It’s a complicated problem. Because at the end of the day, we don’t want to limit the services that we have for the students, but these services come at a cost,” Thomas said.
Roberts said the increased minimum wage increase comes at a difficult time for Bradley.
“It will certainly put some stresses and pressures on us,” Roberts said. “At a time when we are facing enormous cost pressures, running an operating deficit, to have the minimum wage also added to that list of pressures will be significant for us. I’m confident we weather that.”
Roberts mentioned his disappointment with the legislature not including any prevision for private universities. However, he hopes to find a way to lessen the effects of raising the minimum wage.
“The full impact of the legislation will hit us without any of the mitigating steps that the state is willing to take to help others,” Roberts said. “Hopefully in the next year or two, we will be able to get some amendment that will deal separately with the student worker issue.”
In terms of other effects of the increased minimum wage, O’Brien believes there may be price increases in some fields.
“It’s going to hit certain industries much harder than other industries,” O’Brien said. “It’s going to hit fast food hard. It will show up as some increase as price. I think we could definitely see price increases in those industries where it is heavily employed by minimum wage workers.”
