While Illinois employers gear up to accommodate the minimum-wage hikes, there are concerns that the change could result in more statewide job cuts. The state’s minimum wage will increase from $14 per hour to $15 on January 1. Also, the wages for tipped workers will go up from $8.40 per hour to $9. The wage increase also extends to young workers under the age of 18 who work fewer than 650 hours a year; their wages will increase from $12 per hour to $13.

Governor J.B. Pritzker, who signed the legislation that led to this change in February 2019, didn’t rule out the possibility of another minimum wage hike in a recent news conference. He said, I’m very, very proud about the work that we did to get from $8.25 to $15. He considers the increase as a significant achievement that gives Illinois a competitive edge in attracting skilled workers.

Nevertheless, there’s concern that the wage increase may potentially lead to a surge in unemployment in the state. When the law was enacted in February 2019, the state’s unemployment rate stood at 4.8%. Now it’s at 5.3%, which leaves Illinois with the third-highest unemployment rate in the country, only behind Nevada (5.7%) and California (5.4%). Of note, all the states bordering Illinois have lower minimum wages and lower unemployment rates.

Furthermore, a report from Reason.org claims that many studies have shown job reductions coinciding with minimum wage increases. Economists at the Federal Reserve Bank of St. Louis also indicated in 2021 that significant wage hikes could lead employers to replace human labor with automation.

Chicago adopted a similar policy this July, elevating its lowest wage to $16.20 per hour for firms with at least four employees. The minimum wage for tipped workers in Chicago has also increased to $11.02 per hour. Responses to these measures have been mixed, with some suggesting that they have led to numerous bar and restaurant closures in Chicago.