Daley and Blago Want to Maximize the Minimum Wage

By Scott Smith in News on Nov 14, 2006 4:30PM

Mayor Daley and Governor Blagojevich are asking lawmakers to increase the state’s minimum wage by a dollar, to $7.50 an hour.

Illinois’ wage of $6.50 an hour (signed into law by Blago three years ago) is already higher than the federal minimum of $5.15 an hour. Despite the Democrats holding the governor’s seat and a majority in the General Assembly, one state representative thinks it will be a tough bill to pass, which is both hysterical and sad. The governor's goal is to get the bill passed before the veto session ends on November 30.

The mayor and governor’s support for higher wages comes in the wake of last week’s election that saw six states passing ballot initiatives to raise the minimum wage. Moreover, the Democrats have said that an increase in the minimum wage is one of its biggest priorities once the 110th Congress convenes in January.

Opposition to an increase in the minimum wage (especially among Republicans) centers on the harm it will cause to small businesses. The National Federation of Independent Businesses opposes a wage hike, but as a recent article in The Economist pointed out:

Today's consensus, insofar as there is one, seems to be that raising minimum wages has minor negative effects at worst. Lawrence Katz, an economist at Harvard University and signatory of the EPI's letter, agrees that “most reasonably well-done estimates show small negative effects on employment among teenagers.”

The piece also notes that while an increase in the minimum wage can help those Daley describes as “the people near the bottom of the economic ladder,” an expansion of the Earned Income Tax Credit would do more. Studies have shown that it — along with the elimination of sales tax on food — would do more to help those living below the poverty line than an increase in minimum wage. But, as seen in that one "West Wing" episode, the EITC isn’t quite sexy enough to get widespread support. Perhaps, as Charlie discovered, it just needs a better name. Suggestions?