Hourly pay in the city rises every year per ordinance. On July 1 it goes to $17.05.
Chicago’s July 1 minimum wage increase is a reminder that while such moves are meant to help those most in need, they can reduce the jobs available to younger workers, especially minority teenagers.
Every year, hourly pay in the city rises per the Minimum Wage Ordinance.
While the increase this year is only 45 cents, to $17.05 an hour, Chicago and Illinois should know that more drastic increases could reduce fast-food employment.
California raised its minimum wage from $16 to $20 per hour for workers at fast-food chains with more than 60 locations nationwide. It was one of the largest one-time minimum wage increases in U.S. history and one of the few in recent decades focused on a single industry.
The change cost the state about 18,000 jobs.
Evidence suggests higher minimum wage levels lead to fewer jobs. This is particularly true for low-skill jobs, often the first to decline in response to a minimum wage increase.
The purpose of raising the minimum wage is to increase take-home pay for low-income families, but doing so can result in limited opportunities for younger workers who need entry-level jobs.
The longer teens are out of work while they’re young, the harder it will be for them to get jobs when they are older. Down the road, delays in labor market entry and work experience will reduce lifetime incomes. In the end, high minimum wage rates bring about additional, unnecessary barriers to success for young or low-skill workers.
When government artificially prices labor above its market value, jobs go uncreated. Without the ability to build and grow, the economy suffers and, most importantly, people suffer.
Chicago should increase opportunities instead of taking them away by artificially pricing entry-level workers out of a job.
