By now, most locals are aware that the state of Illinois recently passed a law mandating the minimum wage to increase incrementally to $15 per hour by 2025. On the minimum wage worker side, this is great news, but what about small business owners? What is this new regulation going to do to them?
In January 2020, the minimum wage increases in Illinois rises to $9.25 per hour. (It’s been at $8.25 per hour since 2008.) In July of 2020, it will increase again, to $10.00 per hour. Every year after that, it will increase another $1 per year, until it reaches $15 per hour in 2025. Just a quick math calculation shows that with a $1 per hour increase, it’s an automatic $40 per week for the 40 hour a week employee, plus there would naturally be an increase in the amount of Social Security the employer will have to match. That is a $160 plus increase per month on each employee.
Expect to see local Norris City businesses make some necessary, and probably unwelcome, changes as they look at the coming rise in costs to stay in business. Look for prices to increase for the average citizen, even if the business owners don’t want to raise prices.
One small business owner in Norris City is looking at this prospective future and seeing that, with not only the wage increase, but new regulations, she has decisions to make if she is to stay in business. That business owner is Tammy Musgraves. Her day care is Learn, Grow and Discover, the only service of its kind in Norris City.
Currently 30 families depend on Learn, Grow, Discover for child care and there are 15 people on a wait list to get in her facility. She has room to add more children, but doesn’t have a qualified worker. With just that one worker, she could add 20 children to the daycare. Add to that the fact that recently added regulations require incoming workers to not only be fingerprinted, but to have an FBI background check. This background check has definitely slowed down the hiring and certification process, as it can take up to a year for the FBI check to be finished. What this means is, that, though the employee may work at the daycare, they cannot be left alone with children, which means another employee must always be with them until that person can be certified. Musgraves is the director of the daycare, but finds herself working a lot in the kitchen and in the classroom.
The actual requirements of training and certification of daycare workers is a bit staggering when one looks at the list, and the employees must be paid for all of the hours required to complete the state-mandated training. These are hours that don’t include their time actually working at the center. There are approximately 45 hours of training in child care and food handling that must be completed by each employee and some of these require annual renewals. The daycare must pay each employee for these training hours.
All employees are required to be fingerprinted. The fingerprinting process takes place in Marion and Mt. Vernon, Ill. Both locations are an hour away. Employees must be paid for the time it takes them to travel to have this done. DCFS pays for these requirements.
It costs $325 per year to have someone to monitor the fire alarm system that is connected to 911, which the daycare is required to have. Radon testing of the center costs $275 and must be done every three years. Lead testing is usually required, but with the current facility being built after 2000, the center is not required to have that done, but Musgraves is still required to take the testing online which takes time to do. The Public Health Department used to charge $55 for kitchen certification; now the price has increased to $120.
The payments on the building are $1500 per month, and Musgraves has four more years to pay it off. She has been in the daycare business since November 2006. The new building was built in 2009 at 200 E. Gossett St. Plumbing alone cost her $20,000 on the facility.
The minimum wage increase is causing her to re-think things.
“My expenses will increase, so I am giving consideration to refinancing my building to lower the payments, but with only four years left to go to pay it off, I hesitate to do that.” Increasing daycare prices is a consideration, although she believes she is comparable to other daycares.
“I really don’t want to do that, but I don’t think I will have a choice.” The other option is that the daycare won’t continue, which would be difficult for parents in the area.
Currently about half of her payments come from the state of Illinois, but despite the financial difficulties Illinois faces, Musgraves said the state is pretty prompt about reimbursement. She drives her state billing to Carterville because mailing it slows down the reimbursement. But Musgraves isn’t getting rich off this venture.
“I take $800 to $1000 per month from the business. What I do is not about the money, but if I can’t even take that, I’m not sure I will be able to continue,” she stated.
Small businesses are the backbone of the community. It would be a shame if the new wage requirements cause the closing of any of them.
The Voice will feature other small businesses in the future and the effects of state policies on their bottom line.
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