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Mon February 27, 2012
Minimum Wage Proposal Provokes Controversy
The legislature’s labor committee will hear testimony this week on a bill to raise the state’s minimum wage. After last year’s successful passage of paid sick leave there are indications it may be a tough political battle. Many businesses also say it’s too soon in a weak economic recovery to further raise their costs. WNPR’s Harriet Jones reports.
House Speaker Chris Donovan, introducing his legislation to raise the minimum wage, invoked some high profile bi-partisan support.
“I don’t usually quote Ronald Reagan, but he once said, the best welfare program is a productive job.”
Donovan points out that the current minimum wage, at $8.25 an hour, pays about five thousand dollars less per year than the federal poverty level.
“People are working, putting in 40 hours a week, 52 weeks out of the year, and they’re earning poverty wages.”
Donovan’s bill would raise the wage to $9 this year, $9.75 next year, and thereafter would peg the wage to inflation.
This is the kitchen at the Flanders Fish Market, a small business in East Lyme, owned by the town’s First Selectman Paul Formica. He says Connecticut already has a reputation as being unfriendly to business.
“and this could be perceived as being another tax to some of the very, very small businesses that may perhaps pay closer to minimum wage, and this might bump them up.”
He says he supports the concept of a liveable wage for all workers, but raising the minimum wage is too blunt a weapon to use. In his industry, Formica says, it will target the wrong people.
“So oftentimes you have a bus person who’s a highschooler or college student – that’s probably 90 percent of those folks. Live at home, not heads of household, no bills to speak of other than whatever they want to spend and maybe gas for a car.”
The restaurant industry in general is highly opposed to the legislation. Server wages are lower than minimum, because of tips, but they are tied as a percentage of minimum wage and would rise with it. Nicole Griffin, President of the Connecticut Restaurant Association says tips mean these workers are already doing well.
“An average restaurant that might be a burger type restaurant, servers are making there a good $20 to $25 an hour, so in this economy and with an increase in the minimum wage just two years ago, it’s certainly not something restaurant employers can afford to do, or are looking to do.”
Tim Phelan at the Connecticut Retail Merchants Association agrees.
“The smaller, independent merchant is trying to keep the business open, and any increase in the cost of doing business is certainly going to put a strain on them.”
And he says, raising the minimum wage can raise the cost of the entire payroll for some businesses.
“Many, many members of our association pay more than minimum wage to begin with, but if the minimum wage goes up, that means that those who are above the minimum wage are going to be saying ‘I’m due for a raise,’ so it sort of forces the cost of business to go up.”
“If you can’t afford to pay the minimum wage, or an incremental increase in the minimum wage, I question the value of those jobs.”
Kurt Westby is director of 32BJ of the Service Employees International Union in Connecticut. He says if the minimum wage had been pegged to inflation in the past, it would now stand at $10.50 an hour in Connecticut
“There is a very large and growing number of people who work in industries where poverty wages are the norm and stagnant. Maybe a quarter of a million people in Connecticut who work in low wage industries that are not going anywhere.”
And he says that is a threat not just to the welfare of those workers, but to the state’s economic stability.
“There are people out there working two, three jobs on minimum wage, and they can’t get ahead, they can’t afford housing, they live on food stamps, they get their insurance at the emergency room and we all pay for it through the uncompensated care pool. So this is a structural problem with the economy, as well as a moral problem in terms of survivability.”
Governor Malloy, who was instrumental in the passage last year of the paid sick leave bill, has so far remained on the sidelines of this minimum wage fight. But the state’s legislators have a consistent record on this issue: Connecticut has raised its minimum wage 12 times in the last 20 years.
For WNPR, I'm Harriet Jones.