FAQ

Cook County Responsible Business Act Frequently Asked Questions

What is the Cook County Responsible Business Act?
The Cook County Responsible Business Act is a proposal to charge a fee to corporations with more than 750 workers who are paid less than the Cook County Living Wage at workplaces within the boundaries of Cook County, or a franchisor whose franchisees collectively employ 750 workers paid less than the Cook County Living Wage within Cook County. The amount of the fee is proposed to be $750 per $1 less than the county living wage ($14.57/$11.66 with benefits) paid to each covered worker.

The funds raised will be allocated for a variety of services that benefit low-wage workers in the County and distributed with the advice of a newly established Family Sustainability Commission, made up primarily of workers, non-profit and community members.

How much revenue will this ordinance generate? How many corporations will be affected?
The Center for Urban Economic Development at UIC did a study on the Responsible Business Act earlier this year and found that over the course of a four-year phase-in, this ordinance would impact 67 large employers and generate as much as $500 million during its first four years and $200 million per year after it is fully phased in.

In the case of franchise workers, who pays the fee?
The franchisor. As the National Labor Relations Board’s recent ruling confirmed,[1] corporations like McDonald’s exert “sufficient” control over the operation and practices of their franchisees, making them the ultimate driver of low-wages, and therefore ultimately responsible for the costs of poverty borne by their workers, Cook County and its residents.

How much will Cook County taxpayers benefit?
This Responsible Business Act is not designed to be a new, general source of revenue for Cook County. The Responsible Business Act will bring additional revenue to Cook County from large corporations that refuse to pay a living wage, but this revenue will be earmarked for essential services like healthcare, affordable housing, job training and other critical services that workers earning poverty wages cannot afford on their own.

Low-wage jobs are supposed to be entry level jobs for young workers. Can’t we just rely on people getting better jobs as they get older?
Most people working poverty wage jobs aren’t teenagers working for pocket change. Eighty- nine percent of workers earning the federal minimum wage are over 20 years old and nearly one in three supports a family. Forty-five percent have at least some college experience.[2] There are not enough quality jobs available, so more and more adult workers are struggling to make ends meet on poverty wages. When employers pay living wages our local economy grows stronger.

Why not simply pass a $15 per hour minimum wage ordinance in Cook County?
The People’s Lobby and People’s Action support a $15 minimum wage. However, the purpose of this act is to highlighting the concrete costs to workers, county government and the entire community when large corporations pay poverty wages. These companies set wage standards in their industries, making it difficult for other businesses to pay a living wage. They also contribute significantly to local poverty and force both their own workers and us to pay for the high costs of poverty.

Cook County is raising the sales tax to cover a massive pension investment shortfall. Won’t revenue generated through this fee end up going to pay for pensions rather than to fund social safety net programs?
The Responsible Business Act earmarks revenue for services like health care, housing assistance, pretrial services and nonprofit organizations serving workers earning poverty wages and their families. The revenue raised by the fee won’t be redirected to cover pension shortfalls or other general Cook County budget priorities. However, at a time when individuals are paying higher sales taxes to make the important pension payments county workers have been promised, it is only fair large corporations should pay their fair share. The Responsible Business Act puts a stop to corporations padding their profits by paying such low wages that workers must rely on Cook County’s social safety net to survive. A strong social safety net is vital, but workers shouldn’t have to rely on it because irresponsible corporations choose to pay poverty wages.

Isn’t the federal government picking up most of the health care expenses for the uninsured residents of Cook County via the Affordable Care Act?
Even with the implementation of the ACA, Cook County expects to incur at least $150 million in unreimbursed health care costs in the next fiscal year.

Won’t this bill give an unfair advantage to businesses operating just outside the borders of Cook County?
Chicago has already raised it’s minimum wage higher than the rest of the State of Illinois. Many suburban areas of Cook County are home to large numbers of low-wage workers who earn and spend money locally. If large corporations operating in Cook County’s suburbs choose to raise workers wages rather than pay a fee under the Responsible Business Act, it will be good for both the lowest paid workers and for the region’s economy.

McDonald’s announced layoffs at its corporate headquarters in Oak Brook in August. If McDonald’s is struggling, won’t this fee cause them to cut more white collar jobs?
Just this Spring, McDonald’s announced it is paying its outgoing CEO a $3 million dollar consulting contract, while giving its incoming CEO a base salary of over $1 million per year and an incentive package worth more than one and one half times that amount. McDonald’s had a net income in the third quarter of 2014 of more than a billion dollars. Large corporations like McDonald’s have put lavish executive pay and short-term profits for shareholders ahead of the well-being of their rank and file workers and it is catching up with them. Paying poverty wages means that McDonald’s restaurant workers can’t afford anything extra – including a meal at McDonald’s. If McDonald’s chooses to paying fair wages to their lowest paid workers, our economy will grow and everyone will benefit. It is also the right thing to do: people who work shouldn’t be forced to live in poverty.

Won’t this bill encourage other large employers to cut jobs?
The Act includes strong provisions that expressly prohibit corporations from cutting jobs or hours to get around the fee. In addition, an economic analysis of the Responsible Business Act for the Center for Urban Economic Development at UIC found that the Act will create a net gain in jobs between 2015 and 2019.

What are the costs to the county of low-wages?
In Cook County, with a GDP of roughly $600 billion, poverty costs the economy $22.8 billion in lost earnings, crime, and poor health. About $1.2 billion of this can be traced back to poverty caused by low wages alone, and more than an additional $200 million to poverty caused partly by low wages.[3]

 


[1] National Labor Relations Board, “McDonald’s Fact Sheet”. https://www.nlrb.gov/news-outreach/fact- sheets/mcdonalds-fact-sheet

[2] National Employment Law Project and Economic Policy Institute, “It’s Time to Raise the Minimum Wage Fact Sheet”. http://www.raisetheminimumwage.com/pages/fact-sheet-time-to-raise-the-minimum-wage

[3] Holzer et al (2007) https://cdn.americanprogress.org/wp- content/uploads/issues/2007/01/pdf/poverty_report.pdf