Gov. Bruce Rauner vetoed a bill Friday that would have raised Illinois' minimum wage to $15 an hour by 2022, arguing it would hurt businesses and ultimately reduce jobs.
Advocates for the wage hike had been anticipating a veto by the pro-business Republican governor. The veto kept Illinois from becoming the third state, after California and New York, to adopt a $15 minimum wage.
Illinois' minimum wage has been $8.25 an hour since 2010. Rauner has previously expressed support for a more modest raise.
The bill would have increased the minimum wage to $9 in January and gradually stepped it up to $15 by 2022. For part-time or seasonal workers under 18 years old, the raise would have been to $12 an hour. To give small businesses time to adjust, the law offered employers with 50 or fewer workers a credit toward their income tax liability that is proportional to the wage increase.
Lawmakers could attempt to override the veto, but it passed both the House and Senate on May 30 with fewer votes than would be needed. The bill was approved 61-53 in the House and 30-23 in the Senate, and each chamber had two members voting present. A veto override would require 71 votes in the House and 36 in the Senate.
"Knowing this was wrong for Illinois he waited to the last minute and, with this veto, Gov. Rauner showed us once again who he is and what his vision is for Illinois: A permanent low-wage economy, where services and infrastructure are slashed, where workers are deprived of dignity and rights and where corporations call all the shots," SEIU Healthcare Illinois President Greg Kelley said in a statement.
Rauner said in a veto message that "helping low-income families and individuals get out of poverty is a top priority," but that economic evidence suggests such a big wage hike would hurt workers more than help.
He cited a University of Washington study, published earlier this year, on the impact of Seattle raising its minimum wage to $13 an hour, as it steps toward $15. That study found the average low-wage worker lost money as employers faced with higher labor costs reduced hours, put off hiring or laid off people. By that study's measures, the hike would cause Illinois low-wage workers to see a net reduction in earnings of $1,500 per year, Rauner said.
The University of Washington study was criticized by some economists and advocates for methodological problems. Other research has found minimum wage increases lift pay with little or no impact on jobs. Advocates said the minimum wage hike could have increased the pay of 2.3 million people in Illinois.
The Illinois Chamber of Commerce, which opposed the bill for being a "job killer," applauded the veto.
"Thanks to the governor's veto of SB 81, Illinois employers can breathe a little easier today," president and CEO Todd Maisch said. "This keeps Illinois in competition with our neighbors by helping to maintain our jobs and to recruit prospective employers."
States and cities have increasingly moved to raise their minimum wages in the absence of federal action on the issue. The federal minimum wage has been $7.25 since 2009.
Chicago's minimum wage, currently at $11 an hour, is rising to $13 by 2019, and Cook County is one year behind it, though many suburbs have opted out.
Minneapolis recently became the first city in the Midwest to adopt a $15 minimum wage, which it will reach by 2024. But other cities have rolled hikes back. St. Louis, which recently adopted a wage hike to $10 an hour, must lower it to $7.70 to match the state minimum after the passage of a new Missouri law.
Rauner's veto comes as the Service Employees International Union, which is behind the Fight for $15 campaign driving many of the wage laws, plans a voter engagement effort to unseat politicians across the Midwest who don't support labor-friendly priorities like a $15 minimum wage, union rights and universal health care.
"The millions of underpaid workers in this state will remember Rauner taking food off our families' tables when we go to the polls in 2018," Adriana Alvarez, a Chicago McDonald's worker and organizer with the Fight for $15, said in a statement.