$15/Hour Illinois minimum wage

55 Replies

Illinois is enacting a statewide minimum wage of $15 per hour by 2025. Have any experienced landlords had this happen in their state or city and what have been the effect on rents? Drastic increases or gradual increases with normal inflation of 2% yearly?

@Cody Gebhart This seems like it will be a good thing for landlords and it may be. There will also be small businesses that can't afford the increased labor costs and companies forced to replace employees with automated equipment. Have you seen the Kiosks at McDonald where you can place your order without having to speak with someone at the counter?

It would also be safe to assume that companies may be forced to eliminate some positions and require the ones that are left to do more work.

It will be interesting to see how this effects the minimum wage workforce and if that workforce is scaled back.

All it does is cause inflation. Watch the price of a bottle of pop.

Laid off tenants are bad payers . If there’s one thing I know about business is that they don’t generally absorb financial hits . Those are passed on and staffing reduced as well if it’s bad enough

When a business owner's cost of doing business increases, he / she does not just reach into the pile of money many imagine the owner to have horded away allowing the cost to be easily absorbed. Instead it is passed on to the customers of that business and/or other means are sought to alternatively lower expenses. The result is ALWAYS some combination of inflation and increased unemployment. I could be wrong, but my feeling is that minimum wage ultimately harms the poor and inexperienced. For me to hire someone at $15/hr, they'd need to be bringing at least $45/hr of quantifiable benefit to my business. Can someone with ZERO experience do that (say a 15 year-old on their first job... mine was at McDonald's at $3.25/hr) - And so how will they ever get the experience!?

I feel sorry for all of those about to lose their jobs. Look for more self check out kiosks at stores, automation in fast food and other low training industries, fewer visitors to Illinois as the cost of conventions and other events skyrocket, Rent control to keep landlords in their place even though our cost of doing business just went up. This could be the start of the death spiral for Illinois. 

NY is doing the same thing, except I believe they plan to be at $15/hr before 2025. My local Wal-Mart just more than TRIPLED the amount of self-checkouts they had. I've never run a business, but it's obvious that anytime a company has an increase in costs it's passed on to the consumer. Wal-Mart, McDonalds, etc. aren't just going to absorb another $6-7/hr increase per employee...they'd be out of business in a  year.

I guess from the LL perspective, the few people who would have a minimum wage job would be able to afford the rent more easily, but less workers means less prospective tenants to choose from.

Just look at other cities and states that have done the same thing . 

I'm concerned that the price of unskilled manual labor will also increase.  Lawn servicers  around here are already billing out at about $100/hr, which is pretty ridiculous as it is for pushing a mower.

Seattle started this a few years ago. Media and academia seem to imply the results are mixed but I see no way that it would be good for the economy or sustainable over time. If $15 an hour is so good, why not mandate $50 an hour so everyone can be rich? Because everyone knows money doesn't grow on trees.

Several provinces in Canada have done this and they are doing it in increments.  Small businesses are the ones that feel the impact most and people are likely to get more per hour, but have hours cut meaning at the end of the day, the employee is no further ahead moneywise.

Originally posted by @Theresa Harris :

Several provinces in Canada have done this and they are doing it in increments.  Small businesses are the ones that feel the impact most and people are likely to get more per hour, but have hours cut meaning at the end of the day, the employee is no further ahead moneywise.

 Lets see if selling Montana to Canada will change the wages

Originally posted by @Chris Szepessy :

NY is doing the same thing, except I believe they plan to be at $15/hr before 2025. My local Wal-Mart just more than TRIPLED the amount of self-checkouts they had. I've never run a business, but it's obvious that anytime a company has an increase in costs it's passed on to the consumer. Wal-Mart, McDonalds, etc. aren't just going to absorb another $6-7/hr increase per employee...they'd be out of business in a  year.

I guess from the LL perspective, the few people who would have a minimum wage job would be able to afford the rent more easily, but less workers means less prospective tenants to choose from.

 Yup Walmart has more self checkouts and implemented order online and pick up your order on a shopping cart and an employee will help you load your car..

Soon Walmart will just be a distribution center where you just order online and pick up.. 

MA just had a minimum wage increase to $12, and plans to hit $15 by 2025.

The dollar increase alone has affected our small business, this equals $80k increase a year. People aren't working harder because of the increase, all it did was create resentment with the people that have been here for a few years. Now we are forced to give even more raises.

Rather than hire somebody else, we are forced to get 3x the output from one person. This doesn't just hurt the company, it hurts everybody.

Perfect example: We have a new customer, if we could ship them everything they wanted we would be set. But We cant keep up. We definitely cant afford to hire more people. Because of that we don't get paid, more mistakes happen, and we miss out on a lot of sales. In the end the company suffers and cant grow, and the worker suffers because there is no place for advancement.

If not for minimum wage, most businesses would pay their employees $2 an hour. To state you're against minimum wage is to state you are against employees rights as well. Take a look at history. Oh, you got your hand caught in machinery and can't work? You're fired. Unions and minimum wage keep people from starving to death. And minimum wage has not kept up with inflation. 

The $15 in 4-5 years is not as big of a deal as people make it out to be. The Target and McDonalds around here are already paying $11-12 per hour. $31,200 a year at $15 an hour. And no, Target, McD's, and Walmart are not barely getting by. To take any of their side is to state "I just want billionaires to have more money". A job has to be more beneficial than staying at home and collecting welfare. 

I think a lot of people who rant and rally for a higher minimum wage turn a blind eye to the repercussions. It seems that the basic elements of economics just fly’s right out the window. 

Yeah sure your making more money as a mandated state minimum but everything from basic services to groceries will keep pace. As for landlords and real estate investors it could go either direction. Charge more for rent, property value goes up. Except now you have to pay that handy man, taxes, and property management company more than you did before.

This of course is an oversimplification of the matter and only time will tell the true outcome of drastic wage increases.

No one is forcing them to work if the employer won’t pay a fair wage . You can pack your skills and ability and go to a different employer, supply and demand ! It is part of a free enterprise system. The other part of the equation i haven’t heard addressed is the folks who make 15-17$ already while their lower skilled coworkers made 8$ ..now the boss must also drastically bump their wages up too to compensate...so it has a damaging snowball effect for everyone . This will kill low skilled jobs plain and simple . Automated Machines have been able to do most of these tasks for years now ,but they were just too expensive . Now that cost is relative to the business owner . Now it’s not such a bad deal to buy a small robot line for 80k that ultimately replaces several 30k a year low skill employees. Robots/Machines don’t call off or ever get sick or show up drunk or steal company profits .

Originally posted by @Hai Loc :

 Lets see if selling Montana to Canada will change the wages

You can't have Montana. We'll gladly take Alberta off your hands though :)

Industries will adjust. People will adjust. All I'm hearing is the exact same thing they said about the auto industry. You cannot stop progress or advancements in technology, even if you keep wages low. Adjust or fail. But to keep wages low is to increase the already horrible income class this country has developed. If you're a small business owner that wants to pay $7.25 an hour, or HAS to pay that, then you will just have to get yourself a $15 an hour job. 

@Danny Grey I’m sure you didn’t mean anything by it.... but just thought it was hilarious a CA resident would reply to the post first! Ha ha

I will chime in here. I can tell you on the NNN commercial STNL retail side in some parts of IL sellers cannot even sell those properties anymore. Illinois is having a pension crisis and their property taxes in some counties are through the roof.

I have clients all over the country nationally for commercial retail investors. The retail center in GA at 5 million price brand new had 34,000 in property taxes. Texas a no income tax state for 5 million center property taxes 54,000 a year. Illinois the same center about 100,000 in property taxes! It is crazy.

Businesses on a NNN lease pay base rent in a retail center plus cam (property taxes, insurance, property management, repairs,etc.) If tenants costs are too high for cam above base rent they can go out of business as the model for profitability no longer works.

These governments for their short comings try to fix issues with high burdens on the backs of small businesses. Most small business owners are owner operators that  with employees tend to make 100k and under a year.

The big companies are what is making the bank. You know what that is why they franchise. Mcdonald's most of their stores are franchised. They do not typically pay labor or own the restaurants just take an ongoing  royalty of gross sales and a franchise fee upfront. They charge for food profit from the commissary to the franchisee and make them buy reimaging store package upgrades. The small business owner can't afford to pay someone 15 dollars an hour to flip a burger. It's actually much higher than that with cost when any health insurance is paid, social security match, workman's comp,etc. That's the sad part is people that do not own businesses generally have no CLUE how much costs there are. They just tend to think the same thing of the landlords. They think they must be rich so load all of these fees and costs on them and they will still be rich. It doesn't work that way folks.

I am a business owner and before that I was in the food business in all facets.

National median income is about 54,000 a year. In some places where median income is above 100k then maybe those folks can pay 15 dollars for a happy meal. In the majority of the country it is not reality. You can't charge 6 dollars for a value meal and then pay someone 15 an hour to make it. The economics once all other costs are factored in for that business model do not work.

Restuarants are also working on machines for fast food in the back that cook the food. So with kiosks and cooking machine you have maybe 3 people in the store (manager, drive thru, cleaner).

Minimum wage jobs in general are meant to be TEMPORARY. They are stepping stones to other higher paying jobs. If a worker makes 7 bucks an hour and decides they do not want to take intitiative to learn higher paying skills then that is on them.

I used to make 7 bucks an hour decades ago. Then I read and learned for thousands of hours and I now make thousands per hour for my time but I earned that right through hard work and dedication. Artificial Intelligence will replace a lot of low level functioning jobs in the future. It's the next big race versus the internet boom in the 90's. The general population wants to get paid all this money but typically do not want to do what it takes to get it. The herds sentiment tends to be minimum work with ultra high pay for efforts and that is not how it is.  

@Anthony Wick I used to agree with, now, as a business owner, I'm not so sure. I'm a gc, say I come and look at a rehab for one of your jobs. To keep the numbers simple, say I bill out at 60 per hour, pay my best guy 30 per hour, and my inexperienced laborer 15. My best guy is 3 or 4 times more productive. Who is getting the biggest benefit? The laborer. You don't want to pay more, I don't want to make less, and my best guy is staying, just now he has to do the grunt work, too. We used to hire 18 year olds, and had to pay 15. Small town, not a lot of available kids that want to work. It just didn't pay, so we no longer do that.

@Cody Gebhart

Living in Portland I can see first hand how the prices of everything is passed onto the consumer. Restaurants, grocery stores all raise their prices... I've also seen some statistics that the majority of these wage increases go towards people paying more in rents. (which I guess is good for landlords) in theory it is good, but I don't think it has the same effects as most academia hoped... Kinda like the tax cuts for corporations and the trickle down theory...

Originally posted by @Anthony Wick :

If not for minimum wage, most businesses would pay their employees $2 an hour. To state you're against minimum wage is to state you are against employees rights as well. Take a look at history. Oh, you got your hand caught in machinery and can't work? You're fired. Unions and minimum wage keep people from starving to death. And minimum wage has not kept up with inflation. 

The $15 in 4-5 years is not as big of a deal as people make it out to be. The Target and McDonalds around here are already paying $11-12 per hour. $31,200 a year at $15 an hour. And no, Target, McD's, and Walmart are not barely getting by. To take any of their side is to state "I just want billionaires to have more money". A job has to be more beneficial than staying at home and collecting welfare. 

 It’s not the minimum wage that’s the problem, it’s the work ethic. 

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