July 24, 2014Client Alert

Campaign to Raise Minimum Wage Scores Three More Significant Victories

In July, the “Minimum Wage Working Group”, a task force created by Chicago Mayor Rahm Emanuel, recommended that the city increase its minimum wage from the current $8.25 an hour to $13 an hour by 2018. The task force also recommended that tipped employees’ wages be increased by $1, to $5.95 an hour, over the next two years.


In the wake of the task force’s recommendation, both workers and employers expressed their disagreement, albeit for different reasons. The Chicagoland Chamber of Commerce and the Chicago Retail Merchants Association both said that such a steep wage increase would make it difficult for Chicago businesses to remain competitive. On the other end of the spectrum, labor officials and leaders of the “Raise Chicago” coalition backed the concept as a step in the right direction, but criticized it as ultimately insufficient.


Illinois voters statewide will get the chance to weigh in on the issue in a November ballot initiative that will ask whether the state minimum wage should be raised from its current $8.25 an hour level to $10 an hour.


The San Diego City Council recently approved, by a 6-3 margin, a phased-in increase of the city’s minimum wage. San Diego’s minimum wage will increase from $9 an hour to $9.75 an hour on January 1, 2015, to $10.50 an hour on January 1, 2016, and to $11.50 an hour on January 1, 2017. Starting January 2019, the city minimum wage will be indexed to inflation.


In approving this wage increase, the City Council abandoned a previous plan to put a proposed increase to $13.09 an hour before voters on the November ballot. The Council President said "this is a reasonable, common sense proposal that maintains tremendous benefits for our workers and our local economy while reducing the potential impacts on businesses."


On the other hand, the San Diego Regional Chamber of Commerce said that raising the minimum wage above that of California would put the city at a competitive disadvantage and that it was "already seeing and hearing from [its] members that [they] are raising prices and cutting jobs in response to the current increase in the [California] minimum wage." California increased the State minimum wage from $8 an hour to $9 an hour on July 1. A recent survey of chamber members revealed that 14% of members were considering moving out of San Diego given the possibility of a minimum wage increase.


These two developments are on the heels of several months of a national coalition of low-wage workers and community and labor organizations pushing State and Federal lawmakers to raise the minimum wage to $15 an hour. Organized labor has scored several high-profile victories in this campaign. For example, earlier this month, the Los Angeles Unified School District raised its minimum wage to $15 per hour. This was a significant political victory for the Service Employees International Union (SEIU), which represents 33,000 of the lowest-paid employees in the nation’s second-largest school district.


With Washington, D.C. stalled in legislative gridlock, the campaign to raise the minimum wage has reached fever pitch nationwide, particularly in the more diverse urban areas, where the cost of living tends to be higher. On June 2, 2014, Seattle voted to raise the minimum wage to $15 an hour. On June 26, Milwaukee County supervisors agreed to place an advisory referendum on this November’s ballot that would raise the state minimum wage to $10.10 an hour. The Cities of San Francisco and Oakland also discussed raising their respective minimum wages to $15 an hour and $12.25 an hour, respectively. So far this year, 38 states have considered minimum wage bills, and eight states and the District of Columbia have enacted new wage laws.


We expect that this issue will continue to develop, and we will keep you informed of all significant developments.

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