Quick Hit Ellyn Fortino Wednesday October 29th, 2014, 2:22pm

Report: Emanuel's $13 Minimum Wage Plan Would 'Shortchange' Women, Minority Workers

Chicago Mayor Rahm Emanuel's proposal to lift the city's hourly minimum wage to $13 would leave out approximately 65,000 low-wage workers who are mostly women and people of color.

That's according to a new Center for Popular Democracy report, which compared the potential impacts of the mayor's $13 minimum wage plan with a competing $15 minimum wage ordinance introduced in late May by a group of aldermen, including members of the council's Progressive Reform Caucus. 

The proposed $13 ordinance specifically "shortchanges" domestic and tipped workers, the majority of whom are women of color, according to the report.

The Raise Chicago coalition, which supports the $15 plan, released the report's findings at a City Hall press conference Wednesday morning. More low-wage Chicago workers would be covered by the $15 plan, which would also almost double the economic impact for the city compared to the $13 measure, the report found.

"With the opportunity to nearly double the economic growth of people across the city, our Raise Chicago ordinance would help propel people towards financial stability, help this city and state with tax revenues, and its effects would ripple through every community in Chicago," said Action Now Executive Director Katelyn Johnson, a Raise Chicago leader. "The mayor's proposal does not do enough to address the needs of Chicagoans and, in fact, will keep people living paycheck to paycheck."

In July, Emanuel, along with 25 other aldermen, introduced an ordinance to bump the city's hourly minimum wage from the current $8.25 to $13 by 2018.

The measure models the recommendations of the mayor-appointed Minimum Wage Working Group, which was tasked with researching and gathering public comment about increasing the city's minimum wage. The mayor formed the commission the same month the ordinance seeking to hike Chicago's base wage to $15 an hour by 2018 was introduced.

Under the mayor-backed ordinance, the city's minimum wage for non-tipped employees would increase by $1.25 in each of the next three years and $1 in 2018 to hit the $13 level. The city's minimum wage would be adjusted each year after 2018 to keep pace with inflation. The tipped minimum wage, which is currently $4.95 at the state level, would be lifted by $1 to $5.95 over two years and indexed to inflation after that.

The $15 plan, on the other hand, would require large employers in Chicago making at least $50 million annually to raise their employees' wages to $12.50 an hour within 90 days. Those companies would then have to raise workers' hourly wages to the $15 level within one year of the measure taking effect.

Businesses with less than $50 million in annual revenue would have a different minimum wage phase-in period. Small and mid-sized businesses would have to increase their base hourly wage to $12 within 15 months. After that, the smaller employers would have to increase their minimum wage by $1 each year until they hit the $15 level by 2018.

Johnson said the mayoral working group's measure "burdens small businesses," because it provides "no separate phase-in period for large corporations and small businesses."

The city's minimum wage under the $15 proposal would be adjusted each year after 2018 to keep pace with inflation. If that plan were adopted, the base hourly wage for tipped workers would be 70 percent of the overall minimum wage.

Tipped workers under the $15 ordinance would earn a $10.50 hourly wage once the phase-in process is completed. That wage would be 63 percent greater than what the $13 plan proposes.

Domestic workers, meanwhile, are covered by the Raise Chicago minimum wage ordinance, but they're excluded from the $13 proposal.

"This exclusion would have a disparate impact on women of color, who make up the majority of domestic workers in Chicago," the report reads.

Ovadhwah "O.J." McGee, a Chicago home care aid and SEIU* Healthcare Illinois member, said workers who provide supports to seniors and those with disabilities, for example, deserve a living wage. McGee, a single father who is also a certified nursing assistant, said he earns less than $13 an hour and struggles to make ends meet. He said "$15 would make such a great difference for me."

"The mayor's proposal will leave domestic workers behind. They wouldn't even get the $13 an hour, and that's an injustice," McGee said, adding that the $13 ordinance also "shortchanges tipped workers, providing them with only a $1.50 wage increase."

"That's a shame," he stressed. "The reality is by leaving domestic and tipped workers behind, the mayor is leaving workers of color behind. The majority of these jobs are ... held by African Americans and Latino workers."

Nearly 40 percent of the city's more than 1.3 million workers living in Chicago make less than $15 an hour, according to the report, which also estimated the total number of workers who would see their wages lifted, either directly or indirectly, by the two proposals.

"Under the $15 proposal, we project that 444,000 workers earning up to $17.30 will receive wage increases related to raising the wage floor," the report states. "Under the $13 proposal, only those workers currently earning up to $15.60, or about 379,000 workers, would receive higher wages."

The $13 measure would leave out 65,000 low-wage workers, including 42,000 Chicago residents, according to the report. Of the 65,000 low-wage workers who would be excluded from the $13 plan, approximately 13,000 are African American and 20,000 are Latino.

Additionally, the mayor's $13 measure "fails to secure the truly robust economic recovery that the $15 Raise Chicago ordinance would achieve," the report reads.

After full implementation, the $15 proposal would generate $2.9 billion in new gross wages; $1.04 billion in new economic activity and 6,920 new jobs; more than $80 million in new sales tax revenues; and $125 million in new income tax revenues, the report found.

On the flip side, the $13 plan would lead to $1.25 billion in new gross wages; $522 million in new economic activity; and $40 million in new sales tax revenues.

"Our research found that the benefits of a $15 minimum wage far outweigh those of the mayor's proposed $13," Connie Razza, director of strategic research at the Center for Popular Democracy, said in a statement. "At a time when income inequality is at historic levels and American communities are still reeling from the financial crisis, two dollars more may well be the threshold between survival and stability."

"For Chicago, it means over half a billion more dollars in economic activity that would benefit small businesses and communities, millions more in tax revenue for the city, and would significantly raise the wage floor," she added.

During the March 18 primary election, Chicago voters overwhelmingly supported a non-binding ballot referendum to increase the city's minimum wage to $15 an hour for employees of companies with annual revenues over $50 million. The referendum appeared on the ballot in 103 city precincts, garnering support from about 87 percent of voters.

"The time to raise the minimum wage to $15 an hour is now, and no half measurers will be accepted," Johnson stressed.

*The SEIU Illinois Council sponsors this website.

Comments

Raising the minimum wage isn't the answer.  Make it easier for the employees to join or form a union.  Let the wages be determined by honest and open negotiations instead of determined by the government.  

More government control and regulations aren't the answer.  Instead make it easier for workers to form or join a union to represent them.  Let the wages be determined by honest and open negotiations instead of determined by the government.  

At the federal level, repeal the Taft-Hartley Act and pass the Employee Free Choice Act - eliminating many of the government control and restriction and restoring freedom in the marketplace.

Less government control and regulation is better.  Let the free market determined wages.

Raising the minimum wage actually works AGAINST unions.  Why join a union, or organize, or pay dues when you can get this benefit from the government?

Bob Kastigar, IBEW Local 1220, Chicago

 

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