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HomeIllinois NewsMinimum wage hike: How much are Illinoisans willing to pay for pizza?

Minimum wage hike: How much are Illinoisans willing to pay for pizza?

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Godfatherspizza-myrtlebeach
SPRINGFIELD – Democrat lawmakers that hold all the power to pass or not pass a statewide minimum wage hike will determine whether or not struggling southern Illinois businesses suffer more and downstaters face deeper job layoffs.

"I'm scared," said Mike Monseur, who owns restaurants in Springfield including Godfathers Pizza and Dew Chilli Parlor. "I'm scared for my company, staff and the future of my community and state. How much will people be willing to pay for a pizza? I can only raise my prices so much before people stop buying my product. Many businesses like mine will be forced to turn out the lights."

During a press conference at the Capitol Monday, business owners and operators from across Illinois warned of layoffs, higher prices for consumers and the possibility of moving jobs out of state if legislation is enacted to raise the statewide minimum wage to $15 an hour.

Monseur and other business owners called on House lawmakers to consider compromise proposals that would make it easier to absorb additional wage costs, such as a regional minimum wage based on the cost of living in different parts of the state. They noted suburban and downstate companies don't enjoy the same economic benefits as those in Chicago, which can rely on millions of tourists and commuters to spend money in the city every day.

"Any changes to the current wage should be tiered, recognizing the cost of living differences between Michigan Avenue in Chicago and State Street in Chester," said Don Welge, president and CEO of Gilster-Mary Lee, a family and privately held food manufacturer headquartered in Chester.

"Our business is extremely competitive. We can lose large amounts of business based upon a 2 cent difference in a box of macaroni and cheese, which we currently make in Illinois. Labor makes up a high percentage of our costs, and it is extremely difficult to pass those costs on to customers," Welge said. "If this wage increase is enacted as-is, we will be forced to move jobs out of Illinois to states such as Missouri and Arkansas where we already have plants, eliminate jobs through automation as well as cutting product lines, and we certainly will not invest in Illinois as expansion opportunities arise."

Michelle McConnell, general manager of the Holiday Inn & Suites Bloomington Airport, said communities downstate are already suffering from years of job losses and would face additional layoffs if a $15 statewide minimum wage is signed into law.

"Our average daily rate is currently $105, but would have to increase to as much as $150 to absorb this minimum wage increase," said McConnell. "Bloomington is not Chicago, we can't get away with charging that much for a hotel room. Visitors, especially our meetings and conference business, will choose to go elsewhere as a result. My greatest fear is that jobs will be lost, especially when you consider that many roles in hotels can easily be replaced with technology like online check-in and using your cell phone as a room key."

Karen Conn, owner of Conn's Hospitality Group, which operates retail, lodging and restaurant locations across central Illinois, said without changes SB1 would mean fewer opportunities and career growth for the 150 workers her family employs.

"Being faced with an increase of labor costs in all our operations leaves us no options but to restructure how we do business, including evaluating each position, examining service levels and hours worked and whether medical, retirement, training benefits and goal incentives are affordable for our small business to continue offering," Conn said. "The result will be a reduction in job positions, hours, benefits, and the overall quality of life for our employees."

The Illinois Retail Merchants Association (IRMA) is committed to further negotiations ahead of a potential vote on SB1 in the House later this week.

"This wage increase wouldn't occur in a vacuum, as tax hikes and added regulations have forced businesses to deal with escalating costs year after year," said IRMA President & CEO Rob Karr. "We've said all along that we are open to a compromise to lessen the burden on businesses so they can continue to serve their communities and employ workers. We implore lawmakers to heed these stories for the sake of our state's economic future."

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6 COMMENTS

  1. There is no doubt that higher wages mean higher prices. The question is how much?
    What are the total additional labor including FICA etc and how many pizzas are sold. Those factors are the real extra costs to business.
    Yes, I have some questions about all of this. I own a farm, born and raised on it. I know that when grain prices go up it hits the media and all of a sudden food prices go much, much higher- in the grocery store and particularly in a restaurant. And once they go up they never come down again even when grain prices slump.
    For example a bushel of wheat makes 70 i lb loaves of bread. If what went from the price the farmer received (about $4.80) and was doubled to $10.00 the cost of the product would be raised only 7.5 cents per loaf.
    Yea, guess again, the gougers would use that as an excuse to raise prices tripe or quadruple or more than that, same goes for corn prices as related to meat prices in stores. You get the picture.
    So a little circumspect questioning of such issues is in order.
    Don’t beleive the government when they tell you anything and question even the business community.

  2. SS is already a disaster. This will result in cost push inflation resulting in increasing SS payout costs as well as more money out of the economy as the maximum taxable SS income will be dramatically raised. Almost everyone I know who hovers around that threshold spends almost every dime once they hit the SS ceiling on pure conspicuous consumption (many people hit is in November or December and use it as Christmas spending money.
    And of course all of this is an illusion. It will simply raise the prices of everything and screw over SS recipients. Simply put SS the income cutoffs for Social Security taxes are not adjusted for inflation each year, so more retirees will need to pay tax on their Social Security payments when they get their COLA.
    This whole idea is stupid.

  3. On the other hand, for some time we, as a nation, needed to have serious talk about labor. Decades ago, as a young man, I started a number of small business concepts, they were all profitable in the sense of putting money in my pocket. But here is a reality, the welfare system truly masks the true cost of labor. I stopped with all business concept that rely on unskilled labor a number of years ago (think Burger King, McDonalds, i,e most restaurants etc), because any reasonable analysis shows they are not viable as concepts unless you factor in the transfer cost to the general public for welfare.
    And that is where we are, a vast swath of our consumer retail economy relies on labor subsidies. It boils down to, no matter how you slice it, many small business owners are simply welfare tarts.
    It is a sad thing, but this is why the Koch brothers, the business roundtable and the Chamber of Commerce want open borders. No one wants to have an honest conversation about the truth surrounding the wages paid for unskilled labor and business.

  4. “I stopped with all business concept that rely on unskilled labor a number of years ago (think Burger King, McDonalds, i,e most restaurants etc), because any reasonable analysis shows they are not viable as concepts unless you factor in the transfer cost to the general public for welfare.”
    Very well stated but totally and purposely ignored as a reality by Republican elites such as Ryan, Bush et al.

  5. I just read that it will be $13 for 16 and 17 year olds, but $15 for everyone else. I suspect that you’re going to see a lot of 16 and 17 year olds doing these jobs again and a lot of unemployed college students. Interesting. Near the statelines, I suspect that this will be accentuated.

  6. Do you know what the problem with this analysis is? These people still exist, either working and collecting these benefits or not working and still collecting these benefits. If working, in a smart state anyway, it would reduce the benefit and possibly result in promotion and end of benefits use period.