By Sonari Rhodes Glinton, WBEZ
Chicago – Illinois Governor Rod Blagojevich has signed into law a dollar-an-hour increase in the state's minimum wage.
Starting in July, Illinois businesses will have to pay most employees at least $7.50 per hour. Three 25-cent hikes will bring the raise to $8.25 by 2010.
The law does not include annual increases tied to inflation.
For that, Blagojevich told reporters, the blame belongs to state House Speaker Michael Madigan, a fellow Democrat.
"We're going to go back in January and try to encourage the Democrats in the House to encourage their Democratic leader to be for working people and give us a cost-of-living increase, fight and work for working people, not for the different special interests that are trying to block a cost-of-living increase for the hard-working men and women of Illinois," Blagojevich said.
A spokesperson for Madigan said the wage hikes will help low-wage workers more than the governor's plan. Business leaders say the higher minimum wage will hurt the state's economy.
David Vite, president of the Illinois Retail Merchants Association, says Illinois is moving too far, too fast when there is already legislation pending for a federal increase in minimum wage.
"It makes Illinois less competitive," Vite said. "Understand that 36 of the 102 counties in Illinois border another state. That means what we're going to find is that we either have to cut people or raise prices."
Vite also says small businesses would suffer most from hikes in the mandatory minimum wage.
Some economists say tax credits would be a better alternative for low income families. Vite says tax credits are a good idea, but they should be handled on the federal level.