Illinois small business cuts 6 jobs immediately after $15 minimum wage hike
A vinyl graphics business in southwestern Illinois wasn’t planning to downsize. But the state’s $15 minimum wage hike has forced the owners to cut six jobs.
Shane Moore and Tracy Ross tripled their business after buying a local vinyl wrap and graphics shop and rebranding it Fenix 5ive in Wood River, Illinois. They pay their top employee $21 an hour.
But work gets slow in the winter, when they go from three window tint and graphics jobs per day to three per week. So they started a winter business on the side, putting vinyl graphics on coffee mugs, buttons and T-shirts – adding six part-time jobs to meet holiday demand.
Those six jobs are gone.
Moore said he can’t afford them since Gov. J.B. Pritzker on Feb. 19 signed a $15 minimum wage into law.
“People might say those were crap jobs, but they sure as heck mattered to those six people. It paid their car insurance, and their gas, and for college,” Moore said. “Who’s going to pay for those things now?”
As soon as both chambers of the General Assembly passed the $15 minimum wage bill Feb. 14, Moore posted on Facebook: “It is not profitable for us to move this division across state lines, so we are forced to close it down. We are frustrated with the lack of oversight of our state leaders and this only hurts area teens and our state’s taxable income.”
He said he let his workers and customers know he was ending production and selling the equipment as soon as he knew he could no longer make it work. For a business that earns 5 cents a button and 15 cents a mug, the margin is simply too thin.
“Because we’re competing with China, even $1 an hour increase in our wages hurts. There’d still be some profit, but not much,” Moore said.
He said customers liked the fact that they were in the U.S. and responded quickly to customer needs. He crunched the numbers for a move a few miles across the Mississippi River to St. Louis, but said there was not enough profit in the side business to justify at least $35,000 he’d need to invest in a move.
While he said he’s no economist, Moore said lawmakers fail to understand the basic fact that the more they tax production, the less production there is to tax. “Our thoughts and prayers go out to all the Riverbend small businesses that will be forced to make the same hard decisions we have been forced to make by our callous and reckless lawmakers,” he wrote on Facebook.
Under Illinois’ new law, the statewide minimum wage will rise to $15 by 2025. Competing small businesses in neighboring Missouri, however, will pay a $12 minimum wage by 2023, followed by annual cost-of-living increases.