One of the centerpieces of Illinois Governor Rod Blagojevich's reelection campaign this year was a promise to raise the state's minimum wage. Last week the Democratic-led Illinois Senate delivered for the Governor, voting 40-17 to boost the state's minimum wage by a dollar an hour to $7.50. The hike goes into effect next July and will be followed by annual increases of twenty-five cents, eventually reaching $8.25 per hour in 2010.

The move catapults Illinois into one of highest minimum wage paying states in the country - and that has many people concerned about its potential drag on the state's economy.

According to a study by the AFL-CIO, Washington tops the nation with a state-mandated minimum wage of $7.63 per hour. Oregon is currently at $7.50 per hour, and Massachusetts will go to $7.50 per hour at the beginning of the year.

But in the Midwest, both Iowa and Indiana pay the federal minimum wage of $5.15 per hour, and Wisconsin is at a slightly higher rate of $5.70

Governor Blagojevich heralded the rate hike, but he's now left hoping Democrats in Congress can deliver on their own pledge to boost the federal minimum wage early next year. Otherwise, Illinois is going to be left at a distinct competitive disadvantage to its neighbors.