Illinois McDonald’s offers iPhones if job recruits stay 6 months
The hospitality industry’s heavy losses during COVID-19 are still being felt, with one McDonald’s offering iPhones to lure recruits. Half the states trimmed unemployment to get workers back, but Pritzker’s message to struggling businesses is they should pay $1.5 billion in new taxes.
“Now Hiring. Free iPhone,” reads the sign in the window of a McDonald’s Restaurant in Altamont, Illinois. A photo of the sign has gone viral.
Several other chains such as Subway and Dunkin have been forced to cut hours or close dining rooms as they struggle to find workers. “Help wanted” signs are common at restaurants and bars.
This issue spreads beyond Illinois, but the state is taking a very different approach as an increase in demand due to vaccinations and federal stimulus has led to labor shortages across the country. Nearly half of the states have rejected the $300 federal unemployment boost as a way to spur residents back into the workforce.
Illinois’ response is for Gov. J.B. Pritzker to propose $1.5 billion in new taxes, mainly on job creators.
Employers are doing all they can to entice the jobless back to work, but when they can’t offer high enough wages initially to get them to give up unemployment benefits it may make more sense to trade an iPhone for a guarantee the worker will stay six months.
Many of these small businesses have suffered heavy revenue losses during the pandemic, leaving many of them on the brink. Data shows during the past year, more than half of Illinois food and accommodation businesses vanished.
That is especially bad for Illinois, where small businesses create 69% of net jobs in the state.
Tax hikes reduce the probability a small business entrepreneur hires workers, research shows. Conditional on hiring employees, taxes also reduce the wages paid to workers.
Unfortunately for those still unemployed, Pritzker is pursuing nine new taxes worth $932 million, including ones that would hurt job creation efforts and also the wages that these businesses are able to offer new employees. The move was decried by the Illinois Chamber of Commerce and other business groups because Pritzker is not closing unfair “loopholes” as he claimed, but rather trying to take back a deal he made early in his term for key tax incentives and deductions intended to create jobs.
Pritzker has also pursued the cancellation of a pandemic recovery tax credit for small businesses that could take from $500 million to $1 billion more from them as they struggle to recover and bring back workers.
It is imperative lawmakers work to avoid the harm to businesses and jobs that tax hikes would create. Economists argue against raising taxes during a recession.
Free iPhones may help to attract a few workers but a serious uptick in wages that benefit all Illinoisans won’t be possible if Pritzker insists on unnecessary tax hikes.