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November 14, 2006

Senate Committee approves Governor Blagojevich’s minimum wage increase proposal, sends bill to full Senate for vote
Hourly wage would rise to $7.50 an hour for nearly 650,000 Illinoisans; Provide annual increases linked to inflation

CHICAGO – The Senate Labor Committee today approved Governor Rod R. Blagojevich’s plan to raise the minimum wage to $7.50 per hour, and provide automatic cost of living adjustments indexed to inflation.  Sponsored by State Sen. Kimberly Lightford (D-Westchester), Amendment 1 to Senate Bill 1275 now moves to the full Senate for consideration. 
Under the terms of the proposal, the state’s minimum wage would rise by $1.00 per hour to $7.50 per hour beginning July 1, 2007.  Starting in January 2008, the minimum wage would be indexed to inflation to provide an annual wage adjustment in order to help workers’ wages keep up with rising prices.  Up to 647,000 Illinois workers are expected to benefit from the minimum wage increase.  In addition, 269,000 children who are supported by minimum wage earners are expected to benefit.
“The people of Illinois sent their leaders a clear mandate last Tuesday: focus on doing things that help working people.  That’s what we’re going to do for the next four years, starting with a raise in the minimum wage.  Clearly, members of the Senate Labor committee share that goal, and I applaud them for quickly moving forward with the minimum wage increase.  I hope the full Senate and House will do their part as well,” Governor Blagojevich said.
“A job should lift you out of poverty, not keep you in it,” said Sen. Lightford.  “Hard-working men and women across this state who need a higher min wage to make ends meet, need a cost of living increase every year.  Work should be valued and rewarded; it is the right thing to do.”
Last month, Governor Blagojevich and Chicago Mayor Richard M. Daley were joined by members of the Illinois General Assembly, labor leaders, and other leaders in the fight for working families when they announced plans to push for the minimum wage increase during the fall veto session.    
Gov. Blagojevich fought for and signed legislation raising the minimum wage in 2003 from the federal level of $5.15 an hour to $6.50 an hour (the federal minimum wage remains at $5.15).  While that difference meant an additional $1.35 an hour (or an extra $2,808 a year for a full-time worker), earning the minimum wage still means earning only a total of $13,520 a year.  That means the current minimum wage annual salary represents only 67.6 percent of the 2006 federal poverty level for a family of four ($20,000) and is just above the threshold for a single parent with one child ($13,200).  The increase to $7.50 an hour will result in a pre-tax gross income of $15,600, an additional $2,080.
By 2007, ten states will have automatic cost of living adjustments tied to inflation in place.  And, on November 7th, voters in Arizona, Colorado, Missouri, Montana, Nevada and Ohio approved minimum wage increases that contain automatic annual cost of living adjustments.
In addition, despite predictions from opponents of the minimum wage that its increase would harm the economy, since the higher wage took effect in January 2004, Illinois has added more than 151,000 new jobs, which is more than any state in the Midwest according to the Federal Bureau of Labor Statistics (BLS).  Illinois has led the nation in job growth twice this year (April and July), which has never happened before in recorded history, and was named the third best state in the nation for attracting new and expanded corporate facilities by Site Selection Magazine.  Inc. Magazine recently named Governor Blagojevich as the second best Governor in the nation for fiscal policy (Blagojevich was also named the top Governor for health care policy). In addition, the unemployment rate has fallen from 6.7 percent in January 2003, when the fight for the higher minimum wage began, to 4.4 percent today.  This rate was the lowest reported since March 1999 and tied for the lowest unemployment rate in the official Illinois series, dating back to January 1976.   


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