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Pritzker Signs Law Raising Illinois Minimum Wage To $15 An Hour By 2025

CHICAGO (CBS) -- The minimum wage in Illinois will gradually rise to $15 an hour by 2025, after Gov. JB Pritzker signed legislation that lays out regular wage increases starting next year.

Pritzker made a $15 minimum wage a cornerstone of his bid for governor, and made good on his campaign pledge Tuesday in Springfield, at a signing ceremony one day before his first budget address.

"Today is a victory for the cause of economic justice," Pritzker said. "This will improve the lives of families across Illinois, and it will lift people out of poverty."

The governor's signature makes Illinois one of the first states to approve a $15-an-hour statewide minimum wage. California, Massachusetts, New Jersey, and New York also have enacted laws to gradually raise their minimum wages to $15 an hour.

Pritzker noted Illinois has not increased its minimum wage in nine years, and said the wage hike would affect 1.4 million workers statewide.

"Today we're making it clear that, if you work hard in this state, you deserve to be able to afford the goods and services that you produce," he said. "Today we are saying that the right to a fair wage does not end at Chicago's border. Workers in East St. Louis, in Peoria, in Springfield deserve that same fair pay."

The first pay hike under the new minimum wage law would kick in on Jan. 1, 2020, when the state's minimum wage will go up $1 to $9.25 an hour. It would go up to $10 an hour on July 1, 2020, and then rise $1 an hour every Jan. 1 through 2025, when the minimum wage will reach $15 an hour.

Illinois State Sen. Kimberly Lightford (D-Maywood), who has been working on minimum wage legislation for several years, said the new law would provide more economic stability for low-wage workers in Illinois.

"I want to put a little shout out to all the little boys and girls whose parents get up when they're still sleeping to prepare a day for them, so that they can have a roof over their head, and they can have food to eat," she said. "I'm just hoping that they're able to take their little children and catch a movie, maybe, or do something fun; because now the economic engine will be turning."

Sam Toia, president of the Illinois Restaurant Association, praised Pritzker for reaching out to the business community to come up with a "reasonable, balanced approach" that addresses the concerns of restaurant owners.

"I appreciate that the state is not making these changes overnight, and it's not leaving businesses without some of the crucial tools they needed to succeed," Toia said.

The legislation creates a tax credit to help smaller businesses offset the cost of the minimum wage hike. Businesses with 50 or fewer employees would be able to claim a tax credit for 25 percent of the cost in 2020. That tax credit would gradually decrease over the next several years, eventually phasing out.

The minimum wage law also preserves the state's so-called "tip credit," which allows employers to pay tipped employees 40 percent of the minimum wage, so long as the employer makes up the difference if employees' tips don't actually add up to at least the full minimum wage.

Employers also would continue to be allowed to pay lower wages to employees under the age of 18, if they work no more than 650 hours a year.

Workers under age 18 currently can be paid 50 cents less than minimum wage if they work fewer than 650 hours a year. The new minimum wage law sets out a new payscale for younger workers through 2025:

  • to $8 an hour on Jan 1, 2020;
  • to $8.50 an hour on Jan. 1, 2021;
  • to $9.25 an hour on Jan. 1, 2022;
  • to $10.50 an hour on Jan. 1, 2023;
  • to $12 an hour on Jan. 1, 2024;
  • and to $13 an hour on Jan. 1, 2025.

Republicans and a number of business groups have criticized the minimum wage law, claiming it would lead to layoffs, shuttered stores, and more automation replacing human workers. They also noted the minimum wage law means significant cost increases for the state, as many state agencies and universities employ minimum wage workers, and the state also reimburses social service agencies with low-wage employees.

"This is only the beginning of J.B. Pritzker's war on taxpayers and small business. Nearly doubling the minimum wage will destroy entry-level jobs, raise prices for consumers, and bust budgets at every level of government. Pritzker pledged to govern differently and listen to all parties and stakeholders, but those turned out to meaningless words," Illinois Republican Party Chairman Tim Schneider said in a statement.

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