Illinois will raise its minimum wage by $1 on Wednesday to $15 per hour, joining more than 20 states increasing minimum hourly wages in 2025.
The minimum wage for tipped workers such as restaurant servers will increase from $8.40 to $9 per hour, and workers under age 18 will be paid $13 per hour, up from $12.
The move marks the seventh and final hike of the state’s minimum wage, as part of legislation Gov. JB Pritzker signed in 2019 that scheduled increases from $9.25 per hour in 2020 to $15 in 2025.
“Since day one of my administration, I’ve made it my mission to build an economy that works for everyone, and raising the minimum wage to $15 an hour fulfills that promise to our working families,” Pritzker said in a December statement. “This increase honors the workers who power our state and ensures they can better support their families, bringing us closer to a stronger, more equitable economy for all.”
On July 1, Chicago raised its minimum wage to $16.20 per hour from $15.80 for employers with four or more workers. The city increases its minimum wage annually based on the Consumer Price Index or by 2.5%, whichever is lower. It also raised the tipped hourly minimum wage from $9.48 to $11.02 in July.
The Illinois Restaurant Association and some Chicago restaurant owners, as well as servers, have said the city’s new tipped minimum wage rate hurts them and warned that eateries are not fully recovered from the COVID-19 pandemic.
They contend restaurants will have to raise menu prices as their labor costs increase, especially amid ongoing struggles with inflation. Subsequently, customers will tip less if food prices go up, and if servers’ base pay is raised, they said. Restaurant owners could also downsize waitstaff or shift to counter service to cut costs.
The federal minimum wage has stayed at $7.25 per hour since July 24, 2009, — the longest period in history without a raise, according to the national coalition Business for a Minimum Wage. The group, citing the U.S. Bureau of Labor Statistics inflation calculator, said purchasing power has “eroded greatly” since peaking in 1968 when the minimum wage was worth $14.76 in 2024 dollars.
Some business owners say a higher minimum wage boosts their business.
“Raising the minimum wage helps economies thrive. We invest in our employees, and the return on that investment is huge,” Mike Draper, owner of Raygun, said in a news release. The Des Moines, Iowa-based clothing and decor company operates a store in Andersonville.
“We welcome the minimum wage increases starting off the year in Illinois, New York and Virginia as well as D.C.’s annual increase in July,” Aaron Seyedian, owner of Well-Paid Maids, said in a news release.
The fair wage home cleaning company launched in Chicago in September — its first Midwest expansion beyond the Washington, D.C., area and New York.
“Our low employee turnover saves us a lot of money and time on hiring and training. And we’re happy to report another year of record revenue for our business,” he said.
Fifteen states, including Washington, D.C., now have a minimum wage of $15 or higher, or are scheduled to phase that pay rate in. They are Alaska, California, Connecticut, Delaware, Florida, Hawaii, Illinois, Maryland, Massachusetts, Missouri, Nebraska, New Jersey, New York, Rhode Island and Washington. Washington has the highest state minimum wage at $16.66, as of Wednesday.
Many cities and counties will also increase their minimum wage in 2025. Before 2012, only five localities had minimum wage laws; currently, 64 counties and cities do, according to the University of California Berkeley Labor Center. But several local minimum wage ordinances have been overturned, including in Miami; Birmingham, Alabama; and Louisville and Lexington, Kentucky.