Passage Of Minimum Wage Legislation Is A Killer For Small Business

 

Editor Paul Osborne

     Last week, Illinois legislators approved a hike in the statewide minimum wage from $8.25 to $15.00 an hour when the full plan takes effect — far more than our neighboring states. Democrat Governor J. B. Pritzker made passing the minimum wage hike one of his campaign promises.

     My thanks to Rep. Dan Caulkins, a Republican from Decatur, for understanding the negative impact on jobs the legislation will have in Decatur and Central Illinois and voting against it.

     Rep. Sue Scherer, a Democrat from Decatur, voted for it along with her Democratic colleagues. I like Sue, but her vote is extremely disappointing to me because of the devastating impact this legislation is going to have on small business in the district she represents. As a small business owner myself, I can assure you, the negative fallout from this vote will make it tougher on small businesses like this newspaper — because of the ripple impact on the cost of publishing our product and transporting it to our subscribers.

     All of the Decatur Tribune employees have been with me for decades and, obviously, will not be directly impacted by the increase. However, other businesses that supply us with materials and services will have to cope with the increase, by either reducing their workforce, or increasing their prices (maybe both) — and that will make their products and services more expensive, not only for our business, but for the public.

     Applying the same increase across the board to all businesses in the state, whether the firms are in Chicago, or in Decatur, just doesn’t make sense. Working in Decatur is a lot different than working in Chicago. This was Chicago-generated legislation, but it is being applied across the entire state, including smaller communities and cities, like Decatur.

     If anyone thinks that local small businesses (the backbone of our economy) is going to increase entry level positions from $310.00 per week, to $600.00 per week and absorb that difference in cost (that doesn’t include paying higher Social Security taxes, etc.) without serious employment and pricing adjustments, that person doesn’t understand how the small business economy works.

     The question facing most small businesses is: “How much are people willing to pay for my service or product?” I associate with a lot of owners of small businesses in Decatur and Central Illinois, and I’ve never heard such negative talk about doing business in our state than I’ve heard since this legislation passed. I really believe, in an economy that’s witnessing several local small businesses calling it quits, this may be the final blow for some of them. They don’t believe downstate has any pull in Springfield and bills introduced by Chicago legislators don’t consider the ramifications on downstate small businesses.

     • LAST WEEK, Monique Garcia, of Mac Strategies Group, interviewed several business owners before the minimum wage hike was approved, who warned of layoffs, higher prices for consumers and the possibility of moving jobs out of state if legislation is enacted to raise the statewide minimum wage to $15 an hour.

     • “I’m scared,” said Mike Monseur, who owns restaurants in Springfield including Godfathers Pizza and Dew Chilli Parlor. “I’m scared for my company, staff and the future of my community and state. How much will people be willing to pay for a pizza? I can only raise my prices so much before people stop buying my product. Many businesses like mine will be forced to turn out the lights.”

     • “Any changes to the current wage should be tiered, recognizing the cost of living differences between Michigan Avenue in Chicago and State Street in Chester,” said Don Welge, president and CEO of Gilster-Mary Lee, a family and privately held food manufacturer headquartered in Chester. “Our business is extremely competitive. We can lose large amounts of business based upon a 2 cent difference in a box of macaroni and cheese, which we currently make in Illinois. Labor makes up a high percentage of our costs, and it is extremely difficult to pass those costs on to customers,” Welge said. “If this wage increase is enacted as-is, we will be forced to move jobs out of Illinois to states such as Missouri and Arkansas where we already have plants, eliminate jobs through automation as well as cutting product lines, and we certainly will not invest in Illinois as expansion opportunities arise.”

     • Michelle McConnell, general manager of the Holiday Inn & Suites Bloomington Airport, said communities downstate are already suffering from years of job losses and would face additional layoffs if a $15 statewide minimum wage is signed into law. “Our average daily rate is currently $105, but would have to increase to as much as $150 to absorb this minimum wage increase,” said McConnell. “Bloomington is not Chicago, we can’t get away with charging that much for a hotel room. Visitors, especially our meetings and conference business, will choose to go elsewhere as a result. My greatest fear is that jobs will be lost, especially when you consider that many roles in hotels can easily be replaced with technology like online check-in and using your cell phone as a room key.”

     Illinois Retail Merchants Association President & CEO Rob Karr stated: “This wage increase wouldn’t occur in a vacuum, as tax hikes and added regulations have forced businesses to deal with escalating costs year after year. “We’ve said all along that we are open to a compromise to lessen the burden on businesses so they can continue to serve their communities and employ workers. We implore lawmakers to heed these stories for the sake of our state’s economic future.”

     Is it any wonder that businesses, along with jobs, are leaving our state for a friendlier business environment in neighboring states? I think it is past time for the legislators who represent us to start voting in the best interests of the people in the district they represent instead of for the party line.

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