$15/Hour Illinois minimum wage

[Cody Gebhart]

Illinois is enacting a statewide minimum wage of $15 per hour by 2025. Have any experienced landlords had this happen in their state or city and what have been the effect on rents? Drastic increases or gradual increases with normal inflation of 2% yearly?

[Joe Scaparra]

This has been a good discussion and a civil one at that, I'm impressed.  Just a couple of points.

1.  Minimum Wage is not meant to be a living wage.  Minimum wage is for jobs that require minimum skills.  Originally designed to allow high school kids an entrance to the workforce to develop a work ethic.  It has never been designed to raise a family.  Usually, there is a disadvantage to the employer for this type of labor; that being part-time (student can't work a full day, increase training to teach skills required, high turnover due to the instability of workers).  However, benefits include reduced labor cost for unskilled, redundant jobs that aid with running a smooth operation.

2.  Unemployment is relatively low across the country.  Demand for workers is increasing.  Demand for good, reliable workers is off the charts!  Just the ability to show up each and every day and give your employer an honest days work will net you more than minimum wage.  Our population growth rate cannot sustain our current culture (google it).  Baby boomers are on the doors of retirement and jobs abound.  

3. I'm 63 and when I was in high school I worked at Jack n the Box, and Dairy Queen among others.  Those establishments were loaded with very young workers.  Today that has seemed to have changed and I see a lot more mature workers behind the counters today. I'm not sure why that is because it seems here in Texas we are building more high schools than ever before.  However, most fast food establishments are always looking for employees.  If you can just show up when you are needed, do the work you are asked, develop your skill and have the ability to eventually teach your job to others you will quickly graduate from minimum wage.  The faster you can do that the faster you will progress out of minimum wage jobs.

4.  Believe it or not, but most minimum wage jobs are entry-level service jobs (fast food).  Fast food consumption is higher among low-income earners.  Raising the minimum wage will raise the cost of goods and service and will hit the low-income earner harder because that segment of society uses that product more. 

5.  Getting this back relative to real estate, in Texas property taxes are relatively high.  Due to the popularity of Austin, property and taxes have made huge jumps.  Lucky for me, I bought most of my property way before this increase.  However, as my taxes have doubled in the last 5 years, I have made a conscious effort to raise my rents to keep pace.  It has been relatively easy for me since my initial acquisition cost is lower than most, but nonetheless, the rise in rents are forcing the low wage earner to move to the outskirts to make ends meet. I will admit, I was relatively slow to increase rents as I was content on the rents I was receiving, but when taxes began making huge jumps it jolted me into action.   I give this example just to point out that if the cost for the production of goods rises, then increase cost for the consumption of those goods will follow.  

6.  The solution to minimum wage for the worker is to increase your skill level and work ethic so you can compete for the non-minimum wage jobs.  I do agree, you can't raise a family on minimum wage, but it was never designed to do that.  

[Philip Williams]

The part about some of your arguments that I just love is how costs will increase if the minimum wage increases!!!! Do costs not already increase lol? Have costs ever gone down? We put in rent increases yearly, the price of big macs already go up. The only thing that has remained stagnant is wages, cost of living has and will continue increasing year after year. 

[Account Closed]

I know when I started working minimum wage was 4.25 an hour. It was suppose to be for entry level positions.  I agree with @Joe Scaparra and see more and more adults working fast food and other jobs normally thought to be a high school/working thru college job.  

The flip side is if minimum wage goes up then it means that unless you are getting a pay raise at your job, your buying power is going down.  

On top of all of that if minimum wage goes up the. The price of services goes up, look at that now it’s  if those same people that were making 7.25 an hour now making 15.00 an hour have to pay more for their goods and services and are back to having the exact same buying power.  Sadly not all people can be wealthy, some people are destined to just scrape by their entire life. What’s the quote, “everyone had the same chance to make something for themselves not everyone will have the ability too”. 

If everyone were equal then no one has an incentive to achieve greatness.  

I’d be curious to see since 15 an hour is just over 30,000 a year are military members going to get a massive pay raise to account for that?  

[Curtis Mears]

@Cody Gebhart

when government tries to control the markets, the ultimate result is almost always the opposite of what was intended. larger companies will replace low income earners with robotics and kiosks. I have already seen automated burger flippers and everyone has seen grocery store self checkout. small businesses will be unable to pay for the technology so they will go out of business. expect a rather large plummet in state GDP. sorry to all the low skill workers as those jobs will disappear. best to move ahead of the law.

[Alan Grobmeier]

@Joe Scaparra, that’s granny behind the counter at your local fast food joint.  Husband is dead, probably not a good investor, & she needs some income.  And probably something to do.  She shows up for work, the ‘kids’ don’t always show up on time.  And sometimes the kids don’t even show up.  ;-)