Dec. 02--During a special Chicago City Council meeting Tuesday to press for a hike in the minimum wage, the aldermen will expound about fairness. About poverty. About justice. The argument for raising the minimum wage will be rooted in populist politics, not in whether doing so will help, or hurt, the job prospects of young or marginally skilled Chicagoans.
We fully expect the proposal to pass. The debate has been all about workers vs. employers. David vs. Goliath. Given the peer pressure to appease, even the hapless Goliath probably would vote yes.
A task force appointed by Mayor Rahm Emanuel studied the issue and recommended a $13-an-hour minimum wage phased in by 2018. Emanuel's proposal to the council would extend the deadline by a year to 2019.
What gets lost in the emotion is the economic argument against a proposal that makes it less attractive to do business in Illinois and Chicago.
This, on top of a few inconvenient facts: Businesses in Illinois and Chicago already pay higher worker's compensation and unemployment insurance costs than do their competitors in Indiana or Wisconsin. Commercial and industrial property owners in Cook County are assessed at a higher property tax rate than are residential property owners -- and you can reliably expect City Hall's own pension costs to push those taxes higher.
And Chicago businesses face a costly regulatory environment. Just ask entrepreneur Carey Cooper, who has lobbied against a higher minimum wage. To open a restaurant recently in River North, he needed aldermanic approval; a building permit; signage and awning approval; parking, loading and towing approval; a sidewalk permit; and a city public health inspection and approval. And a liquor license. There was more red tape ensnarling Cooper, but you get the gist.
Now the city will be telling Cooper how much to pay his employees.
Why this City Council hurry-up to further increase business owners' costs of operating in Chicago? Emanuel is rushing approval of a minimum wage hike to beat the General Assembly to the punch. Lawmakers return to Springfield for the second week of their fall veto session, and a smaller minimum wage proposal is on the agenda. Gov. Pat Quinn and other Democrats want to raise it statewide from $8.25 to at least $10. That legislation might pre-empt municipalities from imposing higher minimums.
Emanuel wants to raise the city's wage higher than the state proposal, so he'd like to get an ordinance passed first. Only a handful of aldermen are expected to vote against his plan -- those who want to raise the wage sooner and up to $15 an hour, and a few aldermen who understand the damaging fallout for small businesses that employ people in their wards. A minimum wage gap between Chicago and neighboring suburbs will push some businesses to those suburbs.
Supporters of raising the minimum wage believe doing so would fortify the middle class and infuse more money into local economies by putting higher wages into the pockets of working people.
But the most reliable, safest and smartest way to protect those families and their jobs is to ensure a strong business climate, to encourage companies to locate here, and to preserve the small neighborhood shops that will be hardest hit by a hike in the minimum wage.
We don't expect the aldermen to abide basic economics. In their hierarchy of needs, politics and appearances come first. But we do hope the proposal that emerges at least gives mom-and-pop shops some extra consideration.
Once the proposal passes and businesses feel its impacts, perhaps Chicagoans will better understand why city and state governments here are forced to offer tax incentives and tax increment financing deals to lure companies. They've got to pour on the sugar (our taxpayer dollars) to make up for the salt (their poorly conceived policies).
One thing is certain: Our elected officials have mastered the dubious art of making Illinois an unfriendly and unstable place to start or expand a business. Enacting a citywide minimum wage puts Chicago further out of step with its neighbors.
