Gov. JB Pritzker signed a state-wide minimum wage increase into effect Tuesday, raising the minimum wage to $15 an hour by 2025 – a raise that will cost the university an additional $6.9 million per year by the end of 2025, according to university spokeswoman Rae Goldsmith.

Wages will increase gradually until hitting $15 in 2025.  According to the bill, the first increase would be from the current minimum wage of $8.25 to $9.25, followed by an increase July 1, 2020 to $10. Minimum wage would then increase by $1 per year until hitting $15 on Jan. 1, 2025.  

“We currently have about 2,300 student employees and about 600 staff who make less than $15 an hour,” Goldsmith said.

Opponents of the bill have raised concerns about how the increase would negatively affect the university and the greater southern Illinois community.

“If the Governor signs this legislation, I’m certain that southern Illinoisans will lose jobs, that businesses will close, and that our costs of living and educating our kids will go up,” State Representative Dave Severin (R-Benton) said in a press release on Thursday.

Goldsmith said it’s possible the university would have to cut student positions but they are looking at other alternatives as well.

“Student jobs have several values; […] they provide work experience for students, they provide financial benefits to the students and of course they provide work for the university to help the university operate,” Goldsmith said. “We don’t want to cut student jobs, of course.”

Proponents of the bill say not raising minimum wage keeps workers working a 40 hour work week at current minimum wage below the federal poverty level.

“We’re keeping people in poverty on a national level,” Senate majority leader Kimberly Lightford said. “That is why you see so many states moving the minimum wage.”

Goldsmith said a wage increase would be a benefit to student employees and to the staff members who make less than $15 an hour.

The bill includes proposed tax breaks for businesses which pay employees minimum wage, however, as a non-profit institution – SIU is not eligible for these tax breaks.

Goldsmith said the state could choose to recognize the additional cost by increasing state appropriations and the first hope is for the state to cover the costs.

Goldsmith provided a breakdown of the calculated additional cost per year, as seen below. Cumulative totals in parentheses are reached by adding base additional cost to new additional cost.

Additional Cost Breakdown by Year, SIUC

Jan 1. 2020: $664,000
July 1, 2020: $585,000 (cumulative $1.25 million)
Total additional cost for 2020: $1.91 million
Jan 1: 2021: $817,000 ($2.07 million)
Jan 1, 2022: $912,000  ($2.98 million)
Jan. 1, 2023: $1.05 million ($4.03 million)
Jan. 1, 2024: $1.31 million ($5.35 million)
Jan. 1, 2025: $1.61 million ($6.96 million)

SIU Carbondale is not the only university facing this predicament. Illinois State University released its own estimation, saying the increase would cost them $600,000 for the first part of 2020 and a cumulative $7.5 million by 2025.

Eric Jome, Director of Media Relations at Illinois State, said Illinois State employs between 4,000 and 5,000 student workers a year who would be affected by the increase.

“It’s just looking at student positions that would be most impacted by them being minimum wage jobs,” Jome said, “and [calculating] that increase based on the general numbers of student employees that we’ve got.”

According to the Illinois State University website, student employees at the university work an average of 10 hours a week but can work up to 28 hours. Student employees are paid – at least – Illinois state minimum wage.

At SIU, student employees are restricted to a maximum of 20 hours a week. Starting wages are $8.25 an hour and the maximum a student employee can make is $8.75 an hour. A total of 2,900 SIU employees would be impacted by the increase.

News editor Rana Schenke can be reached at [email protected].

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