🔒Lawmakers should pause new mandates

On April 30, various business and trade associations held a joint press conference opposing a slew of onerous and unaffordable mandates before the General Assembly.

Bills to rapidly hike the minimum wage, expand paid family medical leave to friends of employees at two-person companies, force employers of hourly workers to pay employees to take days off, and implement the nation's most burdensome harassment training requirements all took center stage.

In other states, job creators and economic drivers are valued; their businesses may deal with a new regulation or prohibition now and then. In Connecticut, we propose multiple significant mandates during a short legislative session that is supposed to be primarily about budget adjustments.

Connecticut's version of economic development is handing millions of taxpayer dollars to barely vetted but well-connected businesses and then triple-counting their growth. Our idea of tax reform is imposing a new 0.5 percent payroll tax on employers to directly fund the Department of Labor's high-cost staff.

It would be better for everyone if the General Assembly put these mandates to bed.

The most challenging proposal is raising the minimum wage very high and very quickly. The admittedly well-intentioned proponents of a $15 minimum wage, if successful, would hurt the very individuals they seek to help.

Connecticut holds the distinction of being the first state to raise its minimum wage to $10.10. Connecticut also holds the distinction of having only recovered 80 percent of its pre-Great Recession jobs and losing jobs in March.

Minimum wage increases have routinely been tied to the elimination of work. For example, the same year that Connecticut raised its minimum wage, the non-partisan Congressional Budget Office analyzed a proposal to raise the federal minimum to $10.10 and found that its implementation would result in the elimination of 500,000 jobs nationwide.

Such a drastic increase to $15 per hour could produce as much harm as good.

Another proposal before the General Assembly would be the creation of a state paid family medical leave program. As currently structured, House bill 5387 would apply to companies with as few as two employees. Further, it provides 12 weeks of paid time off at the employee's full regular wage (up to $1,000 per week). This time is meant to allow an individual to care for sick family, although the bill defines family as “an individual whose close association with the employee is the equivalent of a family member.” That provision, simply put, is impossible to enforce.

These benefits will allegedly be paid for by a 0.5 percent payroll tax on employees. However, since a $52,000-per-year employee would contribute $260 and be eligible for $12,000 in benefits, the program is inherently unsustainable and would almost certainly lead to higher taxes on both employees and, eventually, employers.

There is also no opt-out provision for individuals who do not want the coverage, and startup costs for the program would cost the state more than $13 million, with more than $18 million in annual costs to administer.

In fairness, there are good bills before the General Assembly, too. House bill 5266 would allow state agencies to waive penalties on a business' first regulatory violation, assuming the business is acting in good faith to remedy and produces no personal or environmental harm.

Additionally, House bill 5480 would dramatically improve the unemployment insurance fund's fiscal stability, all without harming businesses or individuals with a practical connection to the labor force.

Rather than spending every legislative session considering new ways to erect barriers to job creation and economic growth, the General Assembly should reverse course.

Joe Horvath is the director of legislative outreach at the Yankee Institute for Public Policy.