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House Dems Want To Raise The Minimum Wage; Malloy Unconvinced

by Hugh McQuaid | Jan 31, 2012 6:18pm
(17) Comments | Commenting has expired
Posted to: Business, Labor

Hugh McQuaid Photo

House Speaker Chris Donovan

House Speaker Chris Donovan and Democratic lawmakers want to raise the minimum wage by $1.50 per hour over the next two years, then index it to rise with the cost of living.

They made their pitch Tuesday afternoon at a Capitol press conference.

If passed, the proposal would raise the wage from $8.25 to $9.00 an hour this year and raise it again to $9.75 next year. After that, the wage would rise automatically as the Consumer Price Index rises, he said. Currently, the legislature takes up the issue of adjusting the minimum wage about every two or three years.

The current minimum wage is not enough for working families to get by, Donovan said Tuesday. For example, a family of three with one person working would earn $17,160 a year under the current minimum wage. That’s $5,000 under the poverty line, he said.

“So people are working, putting in 40 hours week 52 weeks out of the year, and their earning poverty wages,” Donovan added.

About 106,000 people in Connecticut earn the minimum wage and around 83 percent of them are over the age of 20, he said. Many of the jobs that the state has gained as its worked its way out of the recession have been low paying, he said.

“We have mothers and fathers who lost their jobs and are now trying to make ends meet and the jobs that are available to them, because they want to work, are minimum wage jobs. We have to do our best as a society, as members of the General Assembly to say, ‘We understand that you’re working hard and we want to make sure you get enough wages that you are not poor,’” he said.

However, if House Democrats want to see the wage increase signed into law, they will have to convince Gov. Dannel P. Malloy, who isn’t sold on the idea. On a conference call with reporters, the governor said he’s anxious to see how the Earned Income Tax Credit and the paid sick time passed last year will impact the system.

Malloy said it wasn’t his idea to propose the increase but he will watch the debate and reserve judgment.

“I’m not slamming any doors. I’m not saying ‘No’ but I’ll watch the debate and perhaps reach a conclusion subsequently,” Malloy said.

The proposal also is unlikely to be popular with businesses. Andrew Markowski of the National Federation of Independent Business, said raising the minimum wage would be the worst thing for small businesses at this time. If passed, Connecticut’s wage would far exceed our neighboring states, he said.

“If you look at what New York and New Jersey are doing right now, their minimum wage proposals are just trying to catch up to where Connecticut currently is. The last thing we need is to go above and beyond at a time when economic conditions are contracting,” he said.

If the state made its minimum wage one the highest in the nation the year after it became the first to mandate paid time off for sick workers, it shouldn’t expect to attract many businesses, he said.

“It sends the wrong message at the wrong time. It’s a bad idea that’s wrapped in good intentions,” he said. “It claims to help the people it’s going to hurt the most: those people that are seeking entry level or part time jobs.”

Rep. Diana Urban, D- North Stonington, an economist, said almost everyone in the field agrees that as long as the increase in the minimum wage isn’t greater than 10 percent, it doesn’t have a negative impact on employment.

“This is because it gives the chance for markets to adjust and adjust they do,” she said.

Increasing the minimum wage gives the economy a direct boost because minimum wage earners spend their money, Urban said.

“If we’re looking for a bump up in the economy, we’re looking at approximately $71 million that our minimum wage earners will pump right back into the demand side of the equation,” she said.

House Minority Leader Lawrence Cafero said he doesn’t think it’s the right time to increase the minimum wage.

“The speaker and I have had long philosophical conversations about this since he became speaker, as a matter of fact even before. We both agree about the importance of the minimum wage, I think where we disagree is the timing,” he said.

With the state still in the midst of a devastating depression, the proposal would hurt small businesses, he said. Those businesses were hit with a large unemployment compensation increase this past fall, he said.

“Our priority has to be giving people wages as opposed to raising the minimum wage. There are so many people out of work that don’t even have that minimum wage, in this economy we have to focus on getting those people back to work,” he said.

However, Cafero was not opposed to the idea of indexing the minimum wage, which he said wasn’t necessarily a bad idea. If the economy doesn’t improve neither would the minimum wage, he said.

“I think there’s a fairness about that. If people are doing better and costs are going up, the wages should go up. If we’re not doing that well and costs have stagnated, they should not go up,” he said.

If Connecticut moved to an indexed minimum wage it would join nine other states that have adopted a similar system. 

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(17) Comments

posted by: Disgruntled | January 31, 2012  7:57pm

Now that he has gotten his wife a nice sinecure at something a bit beyond minimum wage,Dan can take his time and see which way the wind blows. His new pals in Davos would want him to wait and see.
And Cafero is showing that he really is the working mans friend.
Wow!  $9.75 in two years…enough to still qualify for D-Snap if we get some more bad weather.
Leadership at its finest!

posted by: ... | January 31, 2012  8:51pm

...

Indexing comes off as a good idea at face value. But in the cases of decline (recession), those wages aren’t going to drop.

So we could have a rise to the point of 10 dollars per hour minimum wage, then hit a recession where companies could maintain their full workforce at 8 dollars minimum wage. They would have to lay people off because the minimum fails to follow market standards. For indexing to work, the minimum wage would need the freedom to shift upward and downward if we wish to sustain employment and reduce government spending on unemployment rolls.

And then you have to consider if indexing should be calculated by the total, or by industry. If say the electricity industry get a boom in the CPI that is higher than a drop apparel CPI drops. Should the workers at the apparel store get a raise in minimum wage to afford the rising cost of energy (at the expense of retailer profit), and give the energy workers the raise they deserve? Or should energy workers get a raise in the minimum, while apparel workers see a brief decline in their wages until business picks up again?

posted by: Reasonable | January 31, 2012  9:02pm

Sadly, House Speaker Chris Donovan, and Democratic leaders are doing a number against creating new jobs, or help our stagnated business.

Our state Democratic leadership—must return to reality, “rather that act like loose cannons!”
The state is floundering badly—“under their-way of unrestricted, wrong-way control.”  Both business and taxpayers are taking a beating. Under complete Democratic control, not only Republicans, but also the people of Connecticut, are minority parties—with no reasonable representation available. Sadly, we are approaching a state of socialism in Connecticut.

posted by: ProgressiveandPrudent | January 31, 2012  11:38pm

Donovan is trying to do anything he can to rescue his failing campaign. 

He’s not leading in fundraising, he got a slap in the face when his former Meriden DTC Chair endorsed his primary opponent Roberti, and most Democratic party insiders privately say that he will lose the seat to a Republican.

posted by: AndersonScooper | February 1, 2012  10:03am

@jonessAC12—Do you really the world will end if we give the 100,000 minimum wage earners in the state an extra $30/week? I’m always amazed at a young Republican’s ability to get completely lost in his or her own ideology. I mean if we got rid of the minimum wage, wouldn’t everyone have the chance to get a job, even if it meant they had to work for $25/day? At some point we could really compete with China and child labor? (striking vision for America, btw.)

@ PandP—Quit trolling. Any real progressive would know that the minimum wage hasn’t been increased for two whole years, and that doing something as common sense as indexing it to inflation is just the heart of a true Democrat speaking. (as opposed to Esty, or that daddy’s boy Roberti.)

posted by: johnboy11 | February 1, 2012  10:21am

if you have to pay the dishwasher 10 an hr???you won’t be hiring any new cooks????good thinking

posted by: Color Me Shocked | February 1, 2012  11:23am

Seems there are a few “projects” that lay ahead for the state. Isn’t minimum wage tied into standard labor wage for union workers?  I think I see who’s interests are at heart here.  Color me shocked.

posted by: hartfordresident | February 1, 2012  2:58pm

Malloy doesn’t care bec none of his friends or family members make min wage.

$11 is where it would be now had it kept pace with inflation since 1970.

posted by: ... | February 1, 2012  3:03pm

...

@AndersonScooper: As an ardent Malloy supporter, a former College Democrats President, and a continued supporter of our president, I really hope you don’t mind me having to laugh excessively at being described as a ‘young Republican lost in his own ideology’. Or at least, being grouped into that category.

Sure, I support raising the minimum wage, just perhaps not right now. And I’m not saying indexing is awful, but that is has to be discussed. I guess being socially left and fiscally centrist is no longer possible in America. I’ll get decried by the far right for being a liberal for liking Malloy’s expansion of tax equality on sales and other forms of revenue, then decried a conservative for thinking now might not be the time for a minimum wage increase.

As a college student who has been consistently making minimum wage, I would love a raise myself. I got a raise back when it was 8.00 an hour to 8.25. The moment minumum wage went to 8.25, I thought I’d get 8.50 an hour. Nope, I got kept at 8.25. And because I’m a traveling student, I don’t get enough time at my place of employment to request a proper increase.

I never said ‘get rid of the minimum wage’. And trust me, I know enough about China’s working practices through my own experiences living/studying there to know their idea of income equality is much worse than ours, and would never want to take on their system.

I simply proposed what indexing could be capable of under certain circumstances. But thank you for challenging my personal ideology or representation Mr.AndersonScooper. It gave me a good chuckle and a chance to reflect a bit more on how I stand in this storm of political ideologies.

posted by: Disgruntled | February 1, 2012  3:47pm

It is soooo hard to raise the minimum wage but sooo easy to line the pockets of “job creators” with programs like Dan’s FIRST FIVE JIVE.
According to a report,they just received ANOTHER million dollars from Connecticut…
“In June 2010, when the governor’s office announced the company would relocate from Virginia, EpiEP projected it would hire eight people by June 2011. It now has a staff of two, up from one when it moved to New Haven”

posted by: GoatBoyPHD | February 1, 2012  5:32pm

GoatBoyPHD

Where to go with this?

OK. I support indexing the Minimum Wage to double the Federal poverty income for a single adult or $10.75 an hour.

2)I smell politics. Donovan is selling air to the progressives again. This is a DOA proposal that exists for campaign purposes.

3) It won’t solve CTs employment problems and might make them worse without a comprehensive package to encourage full employment. Now that would be revolutionary. Full employment for the Private Sector.

posted by: Reasonable | February 2, 2012  1:29pm

AndersonScooper:  As a pronouned Democrat, you surprise no one by taking a stab at young Republicans—when House Democrats want to raise the minimum wage.  Our adult, entrenched elected Democrats, are calling all the shots on this issue—so why are you trying to blame youmg Republicans?

Your Democratic cannon, is always pointed at the GOP, as you apparently love the social benefits that bought your Democratic vote!

posted by: Matt W. | February 2, 2012  4:12pm

Matt W.

This is a great example of the Democrats’ chronic refusal to accept the basic economic principal that markets return to equilibrium and that every intervention has consequences.  I’m not saying the minimum wage should or should not be raised but they suggest that it is limited to a question of morality or fairness and then their brain shuts off.  There’s no evaluation of the consequences. They are not even acknowledged! 

Are there positive consequences?  Absolutely!  Who doesn’t want to see someone raised out of poverty or make more money? Will they spend it and potentially provide some economic boost?  Sure.  Will that last?  Unfortunately No.  Markets can be manipulated and tricked in the short term to provide a benefit one way or the other but they ALWAYS return to equilibrium! (Ex:This is why we pay farmers NOT to plant corn.)

Let’s say “Scooper” is right and its only $30/week per employee.  Great! What if you have 100 employees? What if you have 1000 employees?  Well then you begin to evaluate the cost of automating these tasks verses the additional cost and headache of the labor.  At some point, it makes sense and that point is different for every industry and business. The problem is no one knows what the impact will be and they are not honest about the the consequences.

Rep. Urban’s statement that “almost everyone in the field agrees that as long as the increase in the minimum wage isn’t greater than 10 percent, it doesn’t have a negative impact on employment” can most kindly be described as astonishing if we are working from the premise that the market is rational.  There is no magic, just ask those who promoted “fairer” lending standards to mortgage applicants.  If we can agree on that point, functional policy should follow.  Perhaps we should raise the min-wage but lets not do it with our eyes closed.

posted by: ASTANVET | February 2, 2012  8:14pm

Does no one in government actually read history or statistics… Raising the minimum wage EVERY TIME has created more poverty.  For those comments who glibly gloss over that comment in their posts “sure some will lose jobs” - don’t then claim that you are trying to do some Moral thing.  Who determines what is poverty?  The definition for poverty is an arbitrary method of “not being able to acquire a sum of material goods in comparison to the norm”.  Indexing makes this a completely political (not that it isn’t already) fight.  For about a hundred years the progressives have been trying to re-brand a ‘guaranteed living wage’ through constant tinkering.  If you raise the minimum wage again, you will deter hiring because you are forced to hire at a rate for skilled labor, which forces you to be much more cautious about your hiring decisions, or they will start hiring people as independent contractors and not pay them a “minimum wage” anyway! This is another lame attempt at so called social justice, but when you are looking for a job, and willing to do whatever you have to for survival but can’t find one your only alternative is to yet again get on the government hand out line. 

You are all so willing to enslave the poor to your benevolence without thinking of the second and third order effects.  Free markets have produced more prosperity than any other point in history, and your refusal to allow markets to be free has created this mess to begin with.  Let people freely negotiate the wage for their labor.  Both parties gain benefit from the transaction from labor and pay - the employer improves his product or productivity and the person is paid for his percentage of productivity.  Go ahead and check out the economic history on poverty and the minimum wage - we in CT are going in all the wrong directions!  Guaranteed sick days, raise in minimum wage, mandated benefits (which are now entitlements) have any of these measures made connecticut more competitive, how have they worked out in our labor pool?  How has that effected businesses and our tax structure - one of the 5 worst in the nation!  Congratulations General Assembly!

posted by: ALD | February 2, 2012  10:52pm

Ahh Chris Donovan and his min wage solutions once again. So now somehow by increasing it a buck and a half those making min wage will no longer be poor!!!
“We understand that you’re working hard and we want to make sure you get enough wages that you are not poor,’” he said.”
  Yeah so a buck and a half will fix that?? Hint to Chris: Your not running for office in Meriden anymore!!! Your going to have to at least knock on doors to sell that sort of twisted logic outside of Meriden. Better yet how about we stop driving good jobs out of state in the first place??

posted by: crazycat | February 3, 2012  8:39pm

I just want to state that as an individual that receives SSI and had not seen an increase in the benefit amount in 3 yrs( finally received on Jan. of this year), I find it very interesting that the state would increase the minimum wage more quickly than the federal government. This is especially interesting considering that most individuals on SSI are unable to work, and the vast majority live well below the poverty level. These individuals are “stuck”, because the federal government can not afford to raise their benefits, well, the State of CT can not afford to raise the minimum wage either. It is sad to say, but the State Representatives maybe should look at their wages and benefits, perhaps cut those to help others?