GALENA, Ill. — Each new year brings with it the promise of change. For Illinois businesses this year, that change came in the form of increased labor costs.
On Jan. 1, the minimum wage in Illinois increased from $8.25 per hour to $9.25. The increase is part of a larger gradual increase, which will see the minimum wage eventually reach $15 per hour by 2025.
The increase has been championed by Democratic lawmakers and Gov. J.B. Pritzker, who argued last year that a minimum wage hike was long overdue and will help guarantee workers a living wage.
However, some local business owners say this year’s smaller increase is already hurting them.
“There’s no way for such an increase to not have an impact,” said Alana Turner, co-owner of Poopsie’s in Galena. “When you are raising that bottom line, it affects you on all different levels. It’s making changes across the board.”
Turner said Poopsie’s has 15 to 20 employees, a total that increases during the busy seasons. Many of her employees are high school students who are just getting introduced to the working world.
Now, bringing in extra help will be more of a challenge, Turner said.
“Previously, we wouldn’t have to think hard about it,” she said. “Now, we’ll have to think on the cost of that. We might not be able to bring on as much extra staff.”
Poopsie’s isn’t alone, according to Illinois Rep. Andrew Chesney, R-Freeport.
“We are receiving calls about it every day from business owners,” Chesney said. “Small businesses are being hurt by this increase in the minimum wage.”
However, not all businesses are affected. Kimberly Thompson, owner of Grateful Gourmet in Galena, said she already pays her six employees more than $9.25 per hour.
“It doesn’t affect me at all,” Thompson said. “I believe my employees are worth more than the minimum wage.”
Thompson said the minimum wage should have been increased a long time ago. She argued it will help increase the spending power of many residents.
“I don’t believe you can make a living wage working for the minimum wage,” Thompson said. “I think this will be a good change for Illinois.”
More hikes are on the way. On July 1, the minimum wage will increase 75 cents to $10 per hour. In 2021 it will rise to $11 per hour and will continue to increase by $1 annually for the next four years.
Even when the minimum wage reaches $15 per hour, Thompson’s business won’t be significantly impacted, she said.
However, Turner said she will be forced to make cost-saving changes, such as reducing hours or increasing prices.
“I think it’s going to have a much bigger impact on pricing than what consumers are thinking it is going to,” Turner said. “It’s a lot of dollars to make up.”