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Saturday, February 29, 2020

Minimum wage hike not a solution to Illinois' woes, policy pro argues


By Justin Stoltzfus | Jun 12, 2017

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Raising the minimum wage will make matters worse in Illinois, not better, Mike Tanner, a senior fellow at the Cato Institute, told the Chicago City Wire recently.

“A minimum wage hike tends to help the marginally skilled at the expense of the even less skilled,” Tanner said. ”For the poorest in our society, it's bad policy.”

Tanner was responding to a recent endorsement of a minimum wage hike by Robert Reed, a writer for the Chicago Tribune

Mike Tanner

Reed approves of raising the wage to $15 an hour by 2022, offering what he called “economically progressive reasons for increasing the state minimum wage."

“Most employees are working harder and longer than ever before, but too many of those people, primarily in entry or low-end positions, aren't reaping the appropriate financial benefits for their efforts,” Reed wrote, suggesting that if wages followed productivity, the federal minimum wage would be approximately $22 an hour.

Senate Bill 81 would raise the minimum wage in stages, beginning at $9 in 2018 and climbing to $15 by 2022. The measure has passed both houses and now awaits a response from Gov. Bruce Rauner.

Tanner said the bill is wrong for Illinois, which should focus instead on the earned income tax credit, which lowers tax burdens on low-income workers.

“What you want to do is have a wage supplement across the whole society,” Tanner said.

Tanner argued that if wages are stagnating, it's not because small businesses are raking in money -- in fact, he said, many of those small businesses pay their employees much more than the minimum wage.

“We tend to think of companies paying people as little as possible,” Tanner said.

As for tracking and tying wages to productivity, Tanner suggested that the outcome would be much lower than $15 an hour.

Tanner also recommended considering the long-term aims of individual workers who can climb the ladder toward success, as well as increasing education opportunities in the country.

“We should recognize that most people that started at minimum wage don't stay at minimum wage,” Tanner said.

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