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New Year Brings $15 Minimum Wage

Workers across Illinois are now earning a higher minimum wage as the final scheduled increase of the state’s six-year plan went into effect on January 1, 2025.


When Illinois passed a new minimum wage law in 2019, the hourly pay rate was $8.00. The legislation implemented annual increases to help workers keep pace with the cost of living. As of this year, workers aged 18 and older must now be paid at least $15 per hour.


For workers under 18, the minimum wage has risen from $12 to $13 per hour. This marks the final scheduled increase under the law, which was designed to gradually phase in higher wages.


Tipped workers, who are required to be paid a minimum of 60% of the state’s minimum wage, now receive at least $9 per hour. Employers are required to ensure tipped employees earn at least the full minimum wage when tips are included.


The wage increase has drawn praise from workers and advocates who argue it provides much-needed relief to low-income households. Supporters say the higher wage will boost purchasing power and help reduce financial insecurity for many Illinois residents.


However, not everyone is celebrating the change. Critics caution that the higher wage may strain businesses, particularly small enterprises, by increasing labor costs. To manage the financial impact, some businesses might reduce employee hours, cut jobs, or raise prices, which could indirectly affect workers and consumers alike.


The restaurant and retail industries, which rely heavily on hourly workers, have expressed concerns about balancing the higher wage requirements with maintaining affordable pricing and sustainable operations.


Economists remain divided on the long-term impact of the increase. Some studies suggest that while wage hikes may initially challenge businesses, they can also reduce employee turnover, boost worker morale, and stimulate economic activity by increasing consumer spending. Others argue that smaller businesses, already grappling with inflation and other challenges, may feel the greatest pressure.

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