President Obama called for an increase in the minimum wage in his State of the Union address. He proposed raising the current federal minimum hourly pay rate, currently at $7.25, to $9.00. This chart by the Department of Labor shows the minimum wage rates by state.
Illinois already has one of the highest minimum wages at $8.25. In his State of the State address on February 6, Illinois Governor Pat Quinn called for raising the state’s minimum wage to $10 over the next four years.
Here is a round-up of some recent news coverage that highlights the debate on the issues surrounding raising the minimum wage.
Will increasing the minimum wage affect job creation?
Small business owners and worker advocacy groups are likely to take opposite sides when debating the value of increasing the minimum wage. The Chicago Tribune sheds light on this topic, suggesting that Obama will likely hear from small business owners who fear that an increase will hurt the economy.
Business creation, not minimum wage increase, key to growing Illinois economy
An editorial in the Bloomington-Normal Pantagraph suggested that Illinois Governor Quinn’s proposal to raise the minimum wage to $10 over four years will not help the economy. The editorial said that creating new businesses is the key to promoting job growth and improving the economy.
Will payroll tax hike counteract minimum wage increase?
An article in the Huffington Post states that any increase in the minimum wage will likely be lost by the payroll tax hike that went into effect on January 1.
The report suggested that the payroll tax cut will not only decrease annual incomes, but, according to Chief Economist at Moody's Analytics Mark Zandi, will also decrease economic growth by more than half a percentage point this year.