From Friday’s Tribune, “Minimum wage poses predicament for service agencies“:
As Democratic lawmakers renew their push to raise the state’s minimum wage [to $10 in 2015 and $11 by 2017], there’s a key sector of employers that finds itself stuck in the middle — nonprofit groups that care for some of the state’s most vulnerable, including the elderly and disabled.
That’s because while they’d like to pay their workers more, many of those agencies receive the bulk of their funding from the state. Given Illinois’ dire financial situation — which will only grow worse if portions of a temporary income tax increase expire as scheduled Jan. 1 — it means they could be on the hook for higher salaries without getting more money from the state to cover the additional costs.
One proposed amendment would require the state to automatically increase its payments to service providers to cover those providers’ costs increases where due to the increase in the minimum wage. Can the state do this? Can the state (which is already habitually behind on its payments to these agencies, last in line behind unions and road contractors) afford to?
In any case, the rhetoric of minimum wage increase supporters would have you believe that this is a non-issue, because, they say, that an increase will produce more productive employees, and their greater productivity will offset any costs employers face. Not quite correct, eh?
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