Vllage President Hayes and the Minimum Wage

On October 26, 2016 Cook County commissioners voted to raise the minimum wage 

within Cook County to $13/hr. by 2020. This is a gradual rise to $13/hr from the current 

$8.25/hr. The wage will rise to $10/hr in July 2017, $11/hr a year later then $12/hr in July 

2019 and finally to $13/hr in 2020. 

Raising the minimum wage has always been a controversial issue. The anti wagers point 

to Econ 101 that says if you raise wages the quantity of labor demanded will fall that 

would result in unemployment. It is difficult to verify this technical approach to labor 

demand as is frequently the case in text book economics.

In fact the opposite is probably true and has been cited by two labor economists David 

Card and Alan Krueger, in a comparative study when an individual state raises its 

minimum wage and the neighboring state does not. The economists found that contrary to 

popular thought there is a positive effect on employment in the state that raised the 

minimum wage. Their results have been confirmed using data from many other episodes.

There's just no evidence that raising the minimum wage cost jobs, at least when the 

starting point is as low as it is here.

Since Arlington Heights is a home rule municipality it can opt out of the Cook County 

ordinance of gradually raising the minimum wage. This would be a mistake for residents 

and local businesses alike. At a time when demand is slack especially on the local level a 

raise in salary to employees would be a welcome stimulus to the local economy.

On November 7, I addressed the village board on the issue of opting out of the minimum 

wage as the text is listed below:

 
Thank you President Hayes

On October 26th the Cook County commissioners adopted a measure that will increase 

the minimum wage in suburban Cook County to $13/hour by 2020. That is a gradual rise 

from current $8.25/hr. that our lowest paid residents now earn. 

I would ask that given the benefit of a higher minimum wage our community should not 

opt out under home rule of this Cook County measure.

Consider this

According to the BLS about half of the federal minimum wage earners are now over 25 

years old. So these are not teenagers just trying out the labor market. Many workers are 

relying on the minimum wage to support themselves and their families.

Could any of us here possibly survive on $8.25/hour?

Also there is no strong evidence that raising the minimum wage hurts businesses. We 

have many natural experiments that confirms that raising the minimum wage actually 

helps employment and businesses. 

For example, where one state raises the minimum wage and the border state does not, in 

the state that raised the minimum wage their unemployment declined and the economy 

actually did better.

And right now we have that scenario with the City going to $13/hr and the rest at $8.25/hr.

Twenty years ago I would have agreed that raising the minimum wage would not have 

been a good idea. But today with 'secular stagnation', that is the economy is slow with 

plenty of supply side capacity, a demand side stimulus right now such a boost in wages 

would help our community.

Finally raising the minimum wage would

·         Give our residents more spending power that would boost our local businesses.

·         Support our residents that do rely on the minimum wage.

·         It would give a demand side boost to our community versus the supply side stimulus we have always relied upon.

Once again I would ask that the board not opt out under home rule, of the gradual rise of 

the minimum wage to $13/hour by 2020.

Thank you President Hayes and Board members

President Hayes acknowledged my opinion, but said that the board will consult with local 

businesses before deciding action. As usual the businesses will get preference over 

resident's needs.