Minimum Wage Hike Gives Fast Food Operators Major Headaches
CHICAGO (CBS) -- In Illinois, thousands of people are about to get a pay raise.
On Thursday, lawmakers gave final approval to raise the minimum wage to $15.00 an hour. But who will pay the higher costs?
CBS 2 political reporter Derrick Blakley has the story.
Fast food operators are particularly concerned because they fear a higher minimum wage will lead not only to higher costs but also fewer jobs, especially for young people.
For three years, Jennifer Spencer has run the Northbrook Dairy Queen. But the store's been in her family for decades.
"This place has always been my heart," she said.
But Spencer said the $15.00 minimum wage will, in effect, be a tax on everyone.
"The only way that a business makes money is by the customer walking through the door and that's who's going to hurt the most," Spencer said. "The cost of everything going up in the long run, that's who it's going to hurt is the consumer."
The wage hike will come in steps. From $8.25 now to $9.25 next January, then $10.00 in July 2020 with a dollar-an-hour hike each following year until reaching $15.00 by 2025.
Democrats said it's long past due.
"We're taking bold and decisive action because we have for way too long allowed the minimum wage in this state to be a poverty wage," said Illinois State Representative Will Guzzardi (D-Chicago.)
And Dairy Queen worker Bernadette Simpson said she'd benefit from the wage hike.
"For me, it would make it where I didn't have to work multiple jobs," said Simpson. "This isn't my only job. I work one other job and that's to support my daughter."
But Republicans argued businesses won't stand still.
"There's no doubt through automation, through kiosks, that jobs will be lost," said Illinois State Representative David McSweeney (R-Barrington.)
And Spencer agreed, saying higher labor costs means fewer workers.
"Last year, I hired 10 new employees. When the minimum wage goes up starting in 2020, I can see it only being two or three," she noted.
The bill includes a tax credit for small businesses with fewer than 50 workers. And it continues to allow restaurants to count tips toward workers' wages. But that will not help fast food operators.
Governor Pritzker is expected to sign the bill before his budget address next week.
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