STERLING – Raising the minimum wage, taxes and stimulating job growth generated some spirited discussion at a town hall with Democratic State Rep. Mike Smiddy on Wednesday night at Dairy Mart Plus banquet hall.
Smiddy, of Hillsdale, brought up the topic of a proposed minimium wage increase, saying he strongly supports boosting it from its current level of $8.25.
“Ideally, an increase should happen on the federal level, but I don’t think it will,” Smiddy said. “I support the governor’s proposal to raise the minimum wage to $10.”
Several in the audience of about 20 voiced their concerns about the impact that higher wages could have on small business owners.
“I have a friend who is a small businessman, and he says that he’ll have to lay people off if the minimum wage goes up to $10,” Manuel Garcia of Sterling said.
Smiddy said that with minimum wage below the poverty level, it is costing the state $368 million a year for programs to help these workers. The increase could also serve as a revenue generator, boosting local spending at the businesses that pay them.
The profile of the minimum wage worker has also been altered by the recession, thus changing the conversation, Smiddy said.
“The average minimum wage worker is now 29 years of age, and many have degrees or some college,” he said. “During the last recession, 60 percent of the jobs lost were middle class, and only 20 percent of those jobs have come back.”
To small business owners, local businessman Dave Barajas Jr. told Smiddy that adding the minimum wage to everything else they are struggling with becomes excessive.
“Maybe we can handle the minimum wage, but then everything else gets piled on, and it’s just too much,” Barajas said.
Wayne Hill Sr. of East Moline questioned whether anyone would actually win with a minimum wage increase.
“Businesses have to raise prices to pay higher wages and more taxes, so at the end of the day, is anyone winning?” Hill asked.
Smiddy said he agrees that more of the tax burden should be shifted from small businesses to large corporations. He believes that loopholes would be closed by shifting away from what he calls an antiquated tax system based on property.
“Illinois is one of only 7 states that still have a flat-tax system,” Smiddy said. “We need to move to a graduated-tax system.”
“We must find economic balance with the minimum wage and tax reform,” said Jack Stone of Prophetstown. “States that steal our jobs and brag about it have progressive tax systems.”
Ricardo Montanez, owner of Dairy Mart, said that while the math supporting the minimum wage increase makes sense, he told Smiddy he would like something in return.
“I would like to see the same emphasis put on bringing jobs back,” Montanez said. “I came from a manufacturing background, and I saw a lot of jobs go overseas. It’s OK to give them incentives, but tell them they must hire people in return.”
Smiddy said he is not a big fan of corporate incentives.
“Sears got $83 million to stay in Illinois, and then they proceeded to lay off 40 percent of their workforce. Look at companies like Chrysler, Ford and Deere – they are adding jobs in Illinois on their own.”