Chicago Mayor Rahm Emanuel’s campaign said in a tweet that thousands of new jobs have been added and thousands of people are no longer living in poverty since the city required private businesses to increase the minimum wage paid to workers every year starting in 2015.
Emanuel’s campaign is running numerous online ads promoting the minimum wage increase ahead of next year, when he will seek his third term as the city’s mayor. Since the city ordinance took hold, Chicago’s hourly minimum wage for non-tipped adult employees increased from $8.25 to $12. Next year, it goes up to $13. The minimum wage increase is likely to be a signature campaign issue for Emanuel, who faces at least 10 opponents in what is expected to be a tough re-election bid in 2019. He has been severely criticized for failing to curb the gun violence that plagues poor neighborhoods in Chicago and for his handling of police shootings of black men.
Emanuel is a former congressman and served as former President Barack Obama’s first chief of staff.
A look at the Emanuel campaign’s claim:
Emanuel Campaign: “In 2014 the Minimum Wage ordinance was passed in Chicago. Since then: 72,000 more jobs 81,000 people lifted from poverty,” in a tweet this month.
The Facts: Emanuel gets the numbers right — the number of people employed is up and the number of people living in poverty is down in the city — but it’s unknown how the city’s minimum wage ordinance affected those figures.
Emanuel’s team pulled the numbers from an opinion piece published in a Chicago business journal titled “Here’s what Chicago’s higher minimum wage really did,” authored by his deputy mayor and the city’s business affairs commissioner. He linked to the article in his tweet.
An Illinois state employment study does show the number employed in Chicago’s private sector increased from roughly 1,107,300 people in 2014, a year before the minimum wage increased, to 1,179,400 people last year. That’s a difference of 72,000, as Emanuel noted.
But Chicago’s positive job growth isn’t an outlier compared to other major cities, which are also seeing better employment numbers as the country rebounds from the Great Recession, said Peter Norlander, a professor who studies labor markets at Loyola University Chicago.
Raising the minimum wage is a controversial issue. Critics argue employers will be forced to cut back hours or lay off workers to cope with the rising costs of hourly wage. Concerns about the Chicago’s minimum wage jeopardizing jobs have not been borne out, especially given the national economy’s positive performance, Norlander said. Chicago’s job growth is better than in neighboring suburban cities that have not increased the minimum wage, he added.
“The minimum wage is not the biggest driver of employment level,” Norlander said of Chicago. “It doesn’t seem to have an effect one way or another.”
A University of Illinois at Urbana-Champaign study released this summer, also found the city’s new minimum wage ordinance has had “little to no” impact on Chicago’s employment figures so far.
Emanuel is also correct on the city’s declining poverty rate, according to annual American Community Survey data estimates gathered by the U.S. Census Bureau. Since 2014, the year before the city raised minimum wage, the number of people estimated to be living in poverty has dropped from roughly 586,000 to 505,000 in 2016. The estimated share of those in poverty has dropped to its lowest percentage during the last decade, the same data shows.
Experts say there are a number of factors, however, that could be behind the dip. It’s unclear how much impact raising the minimum wage has had on the city’s poverty levels, said Christine Percheski, a sociology professor at Northwestern University.
Percheski said employment rates, more hours available to work, and higher wages all likely contribute to the city’s falling poverty rate. She also noted the city’s poverty rates have been declining since 2013.
“The other thing that’s happening is the unemployment rate has been falling,” Percheski said. “It’s not to say there’s no role for the minimum wage; it probably has some impact. I doubt it’s the whole decline.”