- Jun 19, 2017
Citing the unfair, competitive disadvantage it would create for Northbrook businesses, and in light of the increasing financial uncertainties with the state that puts pressure on local municipalities, Northbrook Village Trustees voted last month to opt out of two Cook County employment mandates. One would have imposed a multi-year minimum wage increase starting at $10 an hour this summer and increasing $1 every year to $13 an hour by 2020 with yearly increases thereafter tied to the CPI. The other would require employers to provide for paid sick leave for all employees. With the vote, Northbrook joined 18 other communities in Cook County, including nearby Glenview and Wheeling, who used home rule authority to opt out of the mandates which otherwise would have gone into effect this month.
After listening to two and a half hours of comments from over 50 individuals, including business owners, residents and community activists, the Trustees voted 6-1 to opt out of the minimum wage mandate, and 6-2 to opt out of the paid sick leave proposal. Trustees agreed with the Chamber’s position that the mandates would place an undue burden on local businesses, and that the matter should be handled by the state, creating a level playing field for everyone.
As a powerful illustration, Trustee Muriel Collison held up a map showing Northbrook isolated from nearby surrounding communities that already opted out of the ordinance. Disagreeing with many vocal supporters of the mandate on the grounds that it would not adversely impact businesses, she stated, “This is not an even playing field” adding that eventually increasing the minimum wage $5 an hour higher than surrounding communities that opted out as well as Lake County “absolutely will make a difference and is not a small cost to our businesses.” She stated “We have to protect our tax base,” noting that the ordinance was basically “shoved at us” without the ability to make amendments or adopt in a different form.
Trustee Bob Israel agreed that the minimum wage mandate treated Northbrook unfairly. In addition, he said “The paid sick leave ordinance is unbelievably difficult to deal with as a business operation.”
While sympathetic to the impassioned comments about the need to pay workers fairly, Trustee Ciesla reminded everyone that the Village continues to face threats from Springfield, including a proposed property tax freeze and the loss of local sales tax to the Internet. Any business looking long-term at staying in Northbrook would weigh the impact of the wage increase as too much to bear. “I’m afraid Northbrook will be a place where businesses won’t come,” she said.
At the meeting, a number of Chamber members representing businesses of all sizes — manufacturers to smaller retailers — spoke candidly about the impact of the mandates. Two board members pointed out the significant financial hardship the mandates would place on the North Suburban YMCA. With 63% of the Y’s budget in personnel related expense, an increase in the minimum wage will have a “spillover effect” on virtually the entire staff as the pay scale would shift upwards. For the Fiscal Year starting in September through August 2018, the increase in the Y’s total payroll would rise $135,900. In its statement, the Y pointed out that each additional fiscal year in which the wage would go up $1, “our payroll will go up a minimum of $80,000 for the current 207 employees, before even contemplating any merit raises (if we could afford it.)”
Brian and Gregg Panek, Panek Precision commented the mandates would be detrimental to not only their manufacturing business but many others in Sky Harbor Business Park. The Paid Sick Leave alone would add $150,000 to their bottom line as well as lost production time of 7,000 hours every year they said. Stating that all of their 185 employees are paid above the current minimum wage and receive other benefits, the proposed wage hike “will have a tidal wave effect on all wages going forward,” with unplanned costs of $350,000 per year, putting them at a disadvantage not only with nearby counties, but with domestic competitors with more favorable business conditions and in the global market where competitors receive government subsidies.
Several senior care businesses pointed out that they are already highly regulated by the Dept. of Public Health and that the mandates would have a devastating effect on seniors. “The alternative is to provide less care, no care, or unlicensed care,” pointed out Bob Caldwell, Hallmark Homecare. Bob Tucker, Senior Helpers concurred. With nearly all of his clients on a fixed income, many already are unable to afford needed services. He predicted that they will go without the help they need, others will employee individuals with no training or background screening.
Jennifer Lawrence and Liz Dunton with Juniper Boutique said the mandates would likely hurt retailers the most since they provide entry-level jobs for people new to the workforce. With salaries accounting for their biggest expense, they expressed concerns about competing against other boutiques in neighboring communities without the mandates. They highlighted the value of providing students with work experience and responsibility, but speculated they would be forced to cut out those positions.