IN 2006, when the Illinois economy was expanding at a moderate pace, lawmakers approved a series of annual increases in the minimum wage, then at $6.50 per hour.
That figure rose to $7.50 in July 2007, to $7.75 in July 2008, to $8 last week and will rise to $8.25 in 2010.
The result is a 27-percent increase over four years that will boost the earnings of a full-time minimum wage worker from $13,520 in 2006 to $17,160 in 2010.
No one foresaw, however, that this wage-hike spiral would be occurring during the most serious global economic downturn since the 1940s.
Illinois has not been immune to those forces. The University of Illinois Flash Index reveals the state's economy has been steadily shrinking since last December.
The 2006 law, then, is placing higher employment costs on Illinois businesses at exactly the wrong time. As a result, a law designed to benefit the least-skilled and lowest-paid workers in Illinois will have just the opposite effect.
The wage hikes also burden Illinois employers with a distinct competitive disadvantage.
For example, Missouri's minimum wage is now $7.05, and even after the federal wage rises to $7.25 on July 24 the pay differential between Missouri and Illinois will exceed 10 percent.
Such differences can be particularly crippling in these volatile economic conditions and a serious impediment to job retention and growth.
Chris Merrett, director of the Illinois Institute for Rural Affairs, believes the core economic axiom that "when you make something more expensive, you get less of it." In this case, you get fewer jobs.
That principle will become increasingly evident as the minimum-wage law of 2006 plays out in Illinois.
While an increase in the minimum wage probably was overdue, it is clear now -- as it was to many at the time -- that legislators overreached.
The state's political leaders must be careful to avoid the same mistake as they struggle with the financial woes now facing Illinois, and should exercise caution in shaping solutions that will be felt far into an uncertain future.
