New Cook County minimum wage, sick leave mandates burden Skokie businesses
August 11, 2017

New Cook County minimum wage, sick leave mandates burden Skokie businesses

Onerous regulations drag down Skokie businesses trying to stay afloat and provide job opportunities for residents who need them.

The Skokie Village Board failed to pass a measure in July that would have exempted the village from Cook County’s new minimum wage and sick leave ordinances that took effect July 1 – as more than 80 percent of Cook County’s 132 municipalities have done. Skokie officials who voted in July in favor of opting out of the new rules expressed concerns that the ordinances would burden local businesses. A new report on the struggles of the Skokie business community shows their concerns were well-founded.

Cook County ordinances raise minimum wage to $13 per hour, mandate up to 5 days’ sick leave

While the federal minimum wage is $7.25 per hour, and Illinois’ statewide minimum wage is currently $8.25 per hour, Cook County has hiked its minimum wage even higher.

In October 2016, the Cook County Board voted to raise the county’s minimum wage to $13 by July 2020. The ordinance phases in the increase: On July 1, 2017, the minimum wage rose to $10, and it will go up by $1 each year after that until it reaches $13 in July 2020. After 2020, the county minimum wage will be subject to increases based on the consumer price index.

However, Cook County’s ordinance provides that when unemployment in Cook County reaches 8.5 percent or higher, the minimum wage will not increase the following year.

Along with the minimum wage increase, the Cook County Board also passed an ordinance mandating that employers in Cook County provide each employee with one hour of sick leave for every 40 hours worked, up to 40 hours of paid sick leave per year, for employees who have worked at least 80 hours within a 120-day period. The mandate also requires employers to allow employees to carry over to the next year half, or up to 20 hours, of their unused, accrued sick leave.

Skokie businesses struggle under new ordinances

Randy Miles, the owner of a Village Inn restaurant in Skokie, doesn’t think his business will last another six months in light of the new rules, according to a report in the Skokie Review. “It has become close to impossible to sustain the Village Inn with the bombardment of taxes, fees and regulation that have just crept into my business world,” Miles said. Miles told the Skokie Review he is interested in moving his restaurant to “one of our surrounding communities that get it.”

Other business owners have also chimed in about the burdens the new ordinances impose on them.

The owner of Evanston Subaru said higher costs under the new ordinances might force him to cut employee hours, according to the Review.

Some have noted the competitive disadvantage under which Skokie businesses now operate, given stores in nearby municipalities that have opted out do not have to follow the same rules. The owner of Skokie Ace Hardware told the Skokie Village Board, “I’ll have to adjust my prices,” according to the Review, while his “biggest competitor right down the street, Menards, … won’t have to … because Morton Grove has opted out.”

The owner of A Plus Pest Control said, “[I]f you have the ordinance here, you’re at a disadvantage. It will hurt my business,” according to the Review.

Research backs up the concerns of local business owners. A Harvard Business School study released in April examined San Francisco-area minimum wage hikes and their effect on restaurants in the Bay Area. The researchers found that across all restaurants, a $1 increase in the minimum wage means a 4-10 percent increase in the likelihood a restaurant will go out of business. The report also found that minimum wage hikes deter the entry of new businesses into the restaurant industry.

The study’s authors noted that according to U.S. Bureau of Labor Statistics data, the restaurant industry uses minimum wage workers more than other sectors.

Skokie, Cook County also burden businesses with high taxes

Unfortunately, it’s not just the minimum wage hike and sick leave mandate that are burdening businesses. Skokie businesses also face high taxes. Miles noted Skokie’s food and beverage tax along with an increase in the water rate and high property taxes. And there’s also Cook County’s new soda tax, which is especially hard on restaurants.

High taxes and onerous regulations such as those in Cook County and Skokie drag down businesses trying to stay afloat and provide job opportunities for residents who need them. It’s not surprising that so many municipalities – including some right next door to Skokie such as Lincolnwood and Niles – have rejected Cook County’s new minimum wage and sick leave ordinances.

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