Report: One in Five Chicago Workers Would Benefit from $15 Minimum Wage for Large Employers

National Employment Law Project

For Immediate Release: March 13, 2014

Contact: Danny Massey, daniel@berlinrosen.com, (646) 200-5323

Emma Stieglitz, emmaS@berlinrosen.com, (646) 200-5307

 

Report: One in Five Chicago Workers Would Benefit from $15 Minimum Wage for Large Employers 

Wage increase on upcoming primary ballot would give a raise to more than 260,000 low-paid workers in Chicago

Chicago, IL – Nearly one out of every five workers in Chicago  – more than 260,000 -- would receive a pay raise under a measure setting a $15 minimum wage for the city’s largest employers with over $50 million in gross annual revenue, according to a new report from the National Employment Law Project.  The measure will appear as a non-binding advisory referendum on Tuesday’s primary ballot in 103 precincts in the city.

The report finds that 510,000 workers in Chicago – more than 38 percent of all wage earners in the city – earn below $15 per hour, and a majority of these workers (51.5 percent) are employed by large businesses with over $50 million in gross annual revenue, according to an analysis of the most recent U.S. Census Bureau data.

“It’s large companies, many of them highly profitable retailers and fast-food chains, that are producing a majority of the city’s low-paying jobs,” said Paul Sonn, general counsel at the National Employment Law Project.  “A $15 minimum wage for the largest low-wage employers in Chicago would improve pay broadly across the city, particularly for women and workers of color who make up the majority of the 260,000 workers who would be affected.”

The study finds that 41 percent of female workers in Chicago earn less than $15 per hour, compared to just 35 percent of all male workers. Over 61 percent of all Hispanic workers in Chicago, and over 45 percent of black workers in the city, earn less than $15 per hour, compared to just under 25 percent of all white non-Hispanic workers.

A growing number of localities across the county have already enacted minimum wages significantly above the federal and state level in an effort to address the impact of low-wage job growth and growing inequality throughout the post-recession recovery. Cities and counties that have enacted higher minimum wages in recent years include San Francisco ($10.74 per hour), Santa Fe ($10.66 per hour), San Jose ($10.15 per hour), Washington, DC ($11.50 by 2016), Montgomery County, MD ($11.50 by 2017), Prince George’s County, MD ($11.50 by 2017), and SeaTac, WA ($15 for certain occupations).

In addition to Chicago, other cities that are pursuing higher minimum wages currently include Seattle ($15 per hour), San Francisco ($15 per hour), New York City, San Diego, Oakland, Portland, ME, and Las Cruces, NM, among others.

A 2011 study of citywide minimum wage increases by the Center for Economic and Policy Research, the most extensive to date, examined minimum wage increases passed in Santa Fe, San Francisco, and Washington, D.C., and found that wages rose significantly for low-paid workers in fast-food, food services, retail, and other low-wage establishments in the years after each increase took effect, without causing any significant change in total employment levels.

A 2014 book-length study of San Francisco’s minimum wage, health care, and paid sick leave laws, which collectively raised the compensation of low-wage workers to 80 percent above the federal minimum wage, found that these laws raised pay without costing jobs. From 2004 to 2011, private sector employment grew by 5.6 percent in San Francisco, but fell by 4.4 percent in other Bay Area counties that did not have a higher local wage. Among food service workers, who are more likely to be affected by minimum wage laws, employment grew 17.7 percent in San Francisco, faster than in other Bay Area counties.

The most rigorous economic research over the past 20 years shows that raising the minimum wage boosts worker pay without causing job losses – even in regions where the economy is weak or unemployment is high.  As summarized recently in a statement by 600 economists, including seven Nobel Laureates and eight past presidents of the American Economic Association, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”

The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org or www.raisetheminimumwage.org.

 

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$10.90

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