News

UI Economist Examines Effects of Minimum Wage Increase

UI Economist Examines Effects of Minimum Wage Increase

An increase in the minimum wage could produce several reactions in the economy.

University of Illinois economist Elizabeth Powers says low-wage businesses, like pizza joints, would try to raise their prices. “Consumers would resist that, and they would find that there are plenty of other foods to eat besides pizza, which maybe are not quite as yummy as pizza but are pretty good, and eventually some of these providers would have to drop out, until the price of pizza was sustainable,” she said.

Other possible adjustments: Low-wage businesses could take less profit, they could try to hire a higher caliber of worker who is worth a higher wage in terms of productivity, or they could economize elsewhere.

Powers says there will be instances where jobs are lost if wages have to be higher, but a raise would put money in the economy and increase demand.

Powers says a minimum wage increase affects relatively few workers, but in the food preparation and serving and building maintenance industries, many workers earn at or near the minimum wage.

The Illinois minimum wage is $8.25 an hour; the federal minimum is $7.25. Both the governor and the president want them boosted into the $10 range and then indexed for inflation. Powers says adjusting for inflation makes sense if you believe in a minimum wage.

 

 

Recent Headlines

in Local

Chicago Lawyer Named to Monitor IDOT Hiring

Noelle Brennan

Noelle Brennan appointed to monitor hiring practices at IDOT.

in Local

Illinois Quarantine for Those Who Touched Ebola Patients

Quarantine

IDPH calls for 21 day quarantine for those exposed to Ebola virus.

in Local

Illinois GOP Unhappy About Counting of Absentee Ballots

voter

State GOP alleges law is not being followed in counting of absentee ballots.

in Local

Jacksonville Police Have “Person of Interest” in Shooting, No One in Custody

gun

Jacksonville Police say they have someone they want to interview in a shooting death from Friday morning.

in Local

Next Generation of Business Leaders Learn From an Internet Pro

computer

Dozens of area high school students spent their morning with a top executive in the social media world