Illinois' Minimum Wage Rate Set To Jump To $13 To Ring In New Year

ILLINOIS — As 2022 gives way to the new year, some workers across the state will see an increase in pay beginning next week.

The state’s minimum wage rate is set to increase to $13 on Sunday, and those workers across the state making less than that will see an automatic hourly jump to the new rate. Thanks to state legislation, Illinois is slowly moving toward a minimum wage of $15 per hour, which will take place on Jan. 1, 2025, after the rate of minimum wage jumps to $14 in 2024.

The current rate of pay for minimum wage workers across Illinois is $12.

The minimum wage increase is expected to affect an estimated 510,400 workers in Illinois, or about 9 percent of the state's 5.7 million wage-earning workers, according to data from the Economic Policy Institute. Illinois workers affected by the minimum wage hike will see an average increase in their annual earnings of about $697, with an average change in their hourly wage of about 50 cents.

An estimated 381,400 children live in households affected by the wage hikes. They represent 13.2 percent of the children living in Illinois.

“Minimum wage increases are a great boost for the new year,” Holly Sklar, CEO of Business for a Fair Minimum Wage said in a statement released on Tuesday. “These needed raises don’t stay in workers’ pockets. They energize communities, as workers and their families have more to spend at local businesses. Minimum wage raises also pay off in lower employee turnover, increased productivity and better customer service, which strengthens small business competitiveness."

The federal rate of minimum wage has remained at $7.25 per hour since 2009 and as of this fall, 15 states have remained at the federal level compared to states like Illinois, where the minimum wage jumped to $12 per hour on Jan. 1 of this year.

Illinois is one of 23 states that will increase its minimum wage in the New Year. California’s increase will make its workers the second highest-paid minimum wage employees in the country, with an hourly rate of $15.50 per hour. The District of Columbia pays its minimum wage workers $16 per hour, which ranks No. 1 in the country.

Two states, Connecticut and Massachusetts, will increase their rate to $15 per hour on Sunday and New Jersey will increase its minimum wage to that level next year. Illinois is one of three states to make the jump in 2024, joining Delaware and Maryland.

Five states — Alabama, Louisiana, Mississippi, South Carolina and Tennessee — have no state-mandated minimum wage rate and rely on the federal level of $7.25 per hour.

While Illinois will jump to $13 this year, the City of Chicago already sets its minimum wage higher than that. The city increased its rate to $14.50 per hour in July, while Cook County increased its rate to $13.35 per hour.

In both the city and Cook County, tipped workers will see their hourly rate jump to $7.80 per hour, which is in line with state law.

Statewide, tipped workers will see their hourly rate go from $7.20 per hour to $7.80. The federal tipped worker wage remains at $2.13 per hour.

Teenagers under the age of 18 who work less than 650 hours per year will also see an increase come Sunday. The minimum wage for those workers will jump from $9.50 per hour to $10.25 and will be at $13 per hour in 2025 when the remainder of the state jumps to $15.

The Economic Policy Institute said that because of long-standing discrimination and occupational segregation, the most concentrated effects are seen among:

• Hispanic or Latino workers, 21.8 percent (20.1 percent of the workforce);
• Black workers, 12.2 percent (9.5 percent of the workforce);
• Multiracial and Native American workers, 14.4 percent (2 percent of the workforce).

The minimum wage increases will “have a meaningful impact on workers struggling to make ends meet,” the think tank said in its release, noting that 23.2 percent of affected workers have incomes below the poverty line, and another 26.5 percent have incomes below twice the poverty line.

Other highlights from the report:

• About 55 percent of affected workers are those 25 and older, and nearly half (45 percent) work full time. Most of the affected workers have a high school diploma or less education, but about 41 percent have at least some college.
• More than 2 million parents will get a raise, including more than 1 million single parents. It’s estimated more than 5.7 million children live in households that will see an increase in earnings in 2023.
• The smallest increase will be in Michigan, where the minimum wage goes up 23 cents to $10.10 an hour.
• The biggest rate hike is in Nebraska, with a $1.50 an hour increase to $10.50 an hour.