Let the debate on Connecticut’s minimum wage begin, again.
The legislative session is only a few weeks old, but state lawmakers are already lining up efforts to raise Connecticut’s minimum wage, a hot button issue for the business community.
The most significant proposal is from Sen. Majority Leader Martin Looney, a Democratic heavyweight from New Haven who is sponsoring a bill in the Labor and Public Employees Committee that calls for a 75 cent increase in the minimum wage for each of the next two years.
Connecticut’s current minimum wage of $8.25 has not been raised since 2010. Looney’s proposal would increase the minimum wage to $9.75 over the next few years, which would give the state the highest minimum wage in the country.
Last year, former House Speaker Chris Donovan pushed a similar minimum wage increase only to be rebuffed by the Senate.
But a new year brings new optimism for proponents of the measure, who say an increase in the minimum wage is needed to keep up with inflation and pay low income workers a fair, livable wage.
It’s not clear, however, if the state’s top Democrat, Gov. Dannel P. Malloy, would support the wage hike.
“While he certainly supports the ideals behind this legislation, we must be mindful of the needs of businesses, especially given the current economic climate,” said Malloy spokesman Andrew Doba.
The business community is already lining up against any efforts to raise the minimum wage, arguing that the state’s fragile economy makes it a terrible time to raise employer costs.
The National Federation of Independent Business (NFIB), Connecticut Business and Industry Association (CBIA) and Connecticut Restaurant Association, among other groups, are teaming up for an aggressive fight to try to defeat the measure.
“Now is the worst time to artificially increase wages,” said Andrew Markowski, Connecticut director of the NFIB.
Connecticut’s $8.25 minimum wage is currently $1 higher than the $7.25 federal minimum wage, which has been stagnant since 2009.
There may also be a push by some democrats in Congress to increase the federal minimum wage to $9.80 over two years, although gaining approval in Republican controlled House of Representatives would be an uphill battle.
Only six states have a higher minimum wage than Connecticut including Illinois, Nevada, Vermont and Oregon. Washington has the highest minimum wage in the country at $9.19, according to Minimumwage.com.
Markowski said increasing the minimum wage would hurt restaurants, retailers and seasonal businesses, which are still reeling from the economic downturn.
With the state’s unemployment rate still elevated at 8.6 percent and a serious budget deficit starring lawmakers in the face, it doesn’t make sense to require employers to pay workers more when the state’s economic picture has gotten more cloudy.
“Increasing the minimum wage higher certainly doesn’t help Connecticut stay economically competitive,” Markowski said.
Restaurants in particular would be hit hard by a minimum wage increase, said Nicole Griffin, executive director of the Connecticut Restaurant Association.
Griffin said restaurants have been hurt by the economic slowdown and tend to be the last businesses to emerge from a recession. Added costs would deepen that hole.
“We will be opposing the increase,” Griffin said. “It’s still a difficult time for restaurants.”
In Connecticut, the minimum wage gets applied differently to servers and bartenders at restaurants. Their minimum wage, known as the tipped wage, is 31 percent less than the regulator minimum wage and currently stands at $5.69.
The allows for lower wages for bartenders and servers because they make most of their money from tips, which can boost their income to as high as $15 to $25 per hour or more at some of the state’s best restaurants, Griffin said.
If the state increases the regular minimum wage, it would force restaurants to pay bartenders and servers more, which would dampen the possibility of other restaurant workers who don’t receive tips, like cooks and dishwashers, from getting raises.
But Wade Gibson, a policy analyst for the Connecticut Voices for Children, a left-leaning think tank, said he thinks an increase in the state’s minimum wage would actually stimulate the state’s economy and create jobs.
He points to a new analysis by the Economic Policy Institute (EPI), which concluded that a two-stage, $1.50 per hour increase in the minimum wage would create or support more than 1,500 jobs in Connecticut by injecting dollars and boosting demand in the communities where these workers live.
More importantly, a minimum wage increase would help about 226,000 workers on the lowest end of the income spectrum get closer to earning a living wage in Connecticut, which Gibson said he estimates is at least $15 an hour.
“It’s a lot more expensive to live here than in most other parts of the country,” Gibson said. “Connecticut’s minimum wage is higher compared to other states because the cost of living here is also much higher.”
Besides pushing the wage hike, Gibson said his organization would also like to link future minimum wage increases to inflation.
According to a study released by Connecticut Voices for Children last year, after adjusting for inflation, the state’s minimum wage has fallen 9 percent since 1979, while the median wage has increased 21 percent.
And a failure to keep pace with inflation means that the minimum wage buys less now than it did 50 years ago, Gibson said.
