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Report: Connecticut’s Living Wage Is $19.08 An Hour

by Christine Stuart | Aug 27, 2014 11:34am
(15) Comments | Commenting has expired
Posted to: Economics, Education, Jobs, Labor

A national research group released a report Tuesday that concluded the living wage for a single adult in Connecticut is $19.08 an hour.

That number increases to $40.48 per hour for a Connecticut adult with two children.

The “Families Out of Balance” report is the first in the 2014 Job Gap Economic Prosperity Series produced by the Alliance for a Just Society. The Connecticut Citizens Action Group helped contribute Connecticut-specific information to the report.

The overall report found that low-income households bear a dramatically disproportionate debt burden. The low-income group has $15.64 in income for every $1 of debt, while more affluent workers have $32.42 for every $1 of debt.

In Connecticut, students graduate with $27,816 in student loans and the average credit card holder in the state has an outstanding debt of $5,617. But those debt figures were not included in the calculation the group used to come up with the living wage, which varies from state to state.

The overall report found that making ends meet can be difficult for any low-wage worker, “but for households saddled with debt, supporting a family on low wages can be next to impossible.”

The living wage varied from $14.40 per hour in Montana to $19.08 in Connecticut, and $22.49 per hour in New York City.

This year, Connecticut was the first state in the nation to adopt a $10.10 an hour minimum wage by 2017, but the report found that “it is still not nearly enough to support a single person, let alone a family.”

A living wage, according to the report, is the hourly pay needed to cover the cost of housing, food, utilities, and other expenses, including modest savings.

“Gov. [Dannel] Malloy and the legislature should be applauded for enacting paid sick leave legislation and increasing Connecticut’s minimum wage to help working families and opponents of these policies should be ashamed of themselves,” Tom Swan, executive director of CCAG, said. “However, these laws are not nearly enough and we will continue to advocate for them to complete their unfinished business, including to demand that large profitable corporations like Walmart stop having taxpayers subsidize their low wages, to continue to fight to make the minimum wage a liveable wage, and to reinvest in higher education in a way that does not leave families struggling with such high levels of debt.”

Swan headed a coalition of labor advocates earlier this year in supporting legislation that would fine employers with more than 500 workers $1 per hour for any workers who are not being paid a standard wage, plus health care benefits or a 30 percent pay differential.

Under the bill, businesses would have the option of either raising wages or paying the fees to help offset what their employees cost the state in subsidies, Swan said.

But a drafting mistake may have contributed to the defeat of the legislation.

By citing the “standard wage”, business associations said labor advocates proposed legislation that would impact far more than what is traditionally considered “low wage” employers.

That’s because standard wage rates exist for every hourly occupation in the state — even those you might consider good paying jobs.

Labor advocates said it was their intention to have it apply only to businesses paying their workers less than the lowest standard wage rate in the state, which works out to about $11.31 an hour.

The legislation, according to the fiscal note, would have impacted about 100,675 of the 771,492 employees who work for firms with at least 500 employees.

Business groups warned lawmakers about the message that type of legislation sends to the business community.

Andrew Markowski, state director of the National Federation of Independent Businesses, said his organization has concerns the bill would set a terrible precedent “by imposing a tax on certain employers that the state deems to be underpaying certain employees.”

Tim Phelan, president of the Connecticut Retail Merchants Association, called it “arbitrary and unfair,” especially when retail sales provide one in every five jobs in the state.

The bill passed the Labor Committee, but was defeated 16-27 by the Finance, Revenue, and Bonding Committee.

The only other state to attempt to pass similar legislation was Maryland and that law was struck down by a federal court judge in 2006.

Markowski said studies like the one above often come from groups that “lack a fundamental understanding of the economy.”

He said the best way to raise wages is to have a vibrant economy and the best way to do that is by lowering the cost of doing business.

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(15) Comments

posted by: rpk31 | August 27, 2014  3:27pm

So excluding taxes, this person has $2,733 in necessary wages per month, or $32,796 per year. So under this anaylsis’ assumed tax payments of $6,520, this person is paying just under 20% of their “living wage” in taxes.

Instead of turning this into a discussion about minimum wage, why isn’t it a discussion about taxes? Why is this person who is barely scraping by paying 20% of their necessary living expenses to the government in taxes? Dan Malloy loves to say that increasing the minimum wage is about what’s fair, well does that sound fair? Why not cut this person’s taxes to something that is within reason, saving them thousands a year and lowering their hourly living wage to something that is attainable in the job market without adding even more burdens on businesses?

It’s this kind of tunnel vision that shows so called “analysis” like this for what it really is: partisan nonsense.

posted by: Joebigjoe | August 27, 2014  5:51pm

Europe tried this living wage fantasy and it’s led to massive unemployment and 35-40 year olds still living with their parents.

posted by: SocialButterfly | August 27, 2014  7:07pm

There are many wotker’s in Conncticut are not earning $2633. per month, and most employee’e working at McDonald’s, Burger King, Wendy’s and Walmart are not earning #19.08 per hour.

posted by: justsayin | August 27, 2014  8:08pm

Rpk31 so you are saying the only fair tax would be a flat tax. Everyone pays their fare share, as Dannel says.

posted by: ASTANVET | August 28, 2014  5:20am

So a report says that a “living wage” is almost 40K a year… to say… flip burgers… awesome…

posted by: GuilfordResident | August 28, 2014  7:05am

Increasing the minimum wage means the state can collect more in income taxes. Why else do you think the state supports this?

posted by: ThomS | August 28, 2014  1:16pm

We are having the wrong conversation here.  Nobody should be trying to make a living or raise a family relying on a minimum wage job.  We need to enable, motivate and encourage people to get the skills and experience needed to earn more than the minimum wage.  Minimum wage jobs are the training ground for tomorrows productive workers or an income supplement alternative.  Raise the minimum and many of those jobs will simply go away depriving workers of that opportunity.

posted by: artythesmarty | August 28, 2014  3:13pm

The average state worker is now over 60k a year or double the living wage..Connecticut average teacger salary is $69165, average starting salary for teachers is $42450.  A recent ad for starting police in Stamford listed 56k ..no need for any govt worker to worry about a living wage(and that does not even include pensions).  Nice for them I guess

posted by: JusticePartyCT | August 28, 2014  5:05pm

Some points to consider…

Congress sets the minimum wage in nominal dollars, so it doesn’t keep pace with inflation. Because the cost of living is always rising, the value of a new minimum wage begins to fall from the moment it is set. (Ironically, Congress has voted itself pay raises many times since 1960s.)

Raising the minimum wage doesn’t increase unemployment. Please study CostCo’s business model vs Walmarts.

Think only teenagers earn the minimum wage? Analysis of minimum-wage workers shows that, at most, 20 percent are teenagers, about 50 percent are full-time employees and about 60 percent are women.

Some people say that raising the minimum wage would hurt small business owners. The truth is that most minimum-wage workers do not work for small businesses. 66% of minimum wage workers are working for companies with more than 100 employees. The three largest employers of minimum wage workers [are], Walmart, Yum! Brands (Pizza Hut, Taco Bell, and KFC), and McDonald’s. Guess how much federal assistance Walmart workers need to take in?

posted by: BillCravenCT | August 28, 2014  5:43pm

BillCravenCT

With all due respect, the proposed bill has been misrepresented in this article. Not once anywhere is the term “standard wage” used in the bill. There was no drafting mistake. The following is merely not correct:

“But a drafting mistake may have contributed to the defeat of the legislation. By citing the ‘standard wage’, business associations said labor advocates proposed legislation that would impact far more than what is traditionally considered ‘low wage’ employers. That’s because standard wage rates exist for every hourly occupation in the state — even those you might consider good paying jobs.”

In the Bill drafted, the Bill Analysis by the LRO, and Fiscal Note by the OFA it states it would have fined employers who paid less than 130% of the minimum wage, with not one reference to a standard wage. It also should be stated the assumptions may not be feasible. The OFA Fiscal Note assumes no employer could alter hiring, move to temporary workers or decrease employee hours because of the law as the Bill states. However, the Bill does not state who would enforce these actions or what specific behavior would be considered a violation.
With all due respect, the proposed bill has been misrepresented in this article. Not once anywhere is the term “standard wage” used in the bill. There was no drafting mistake. The following is merely not correct:

“But a drafting mistake may have contributed to the defeat of the legislation. By citing the ‘standard wage’, business associations said labor advocates proposed legislation that would impact far more than what is traditionally considered ‘low wage’ employers. That’s because standard wage rates exist for every hourly occupation in the state — even those you might consider good paying jobs.”

In the Bill drafted, the Bill Analysis by the LRO, and Fiscal Note by the OFA it states it would have fined employers who paid less than 130% of the minimum wage, with not one reference to a standard wage. It also should be stated the assumptions may not be feasible. The OFA Fiscal Note assumes no employer could alter hiring, move to temporary workers or decrease employee hours because of the law as the Bill states. However, the Bill does not state who would enforce these actions or what specific behavior would be considered a violation.

posted by: dano860 | August 28, 2014  10:32pm

Why would you want to work when you can receive more than $21.00/ hour on welfare in Ct.
http://downtrend.com/robertgehl/welfare-payouts-top-20-per-hour-in-eight-states/

Based upon that we should have a minimum wage of $25.00/ hour,
I said it months ago when they were kicking the $10.10 around and I still believe it. People will go and get a job then…and yes, pay taxes.
Do you pay taxes on welfare benefits?

posted by: Joebigjoe | August 29, 2014  6:26am

Automation and robots will take many of these food service jobs in the not too distant future.

http://money.cnn.com/2014/05/22/technology/innovation/fast-food-robot/

The problem is that we design the products here with smart people that paid attention in school and then manufacture them in China, to bring back here and sell to the businesses.

You wont be able to convince me that UN deals, EPA regulations, our lack of tariffs to equal the playing field, our corporate tax rate, are not all part of some plan somewhere to bring this country down to the level of other countries that dont like our success.

posted by: SocialButterfly | August 29, 2014  6:50am

@dano860: That’s because Malloy does not try to provide jobs, only caters to the welfare vote. Dannel is a carbon copy of Barack Obama in failing as a leader.

posted by: SocialButterfly | August 29, 2014  10:47am

@Joebigjoe: The real robots being concocted in this demise are our consumers who keep losing out due to “Communist Chinaism.” We are now marketing puppets of China, and they realistically own us, as we owe them too much money for financing our no win wars against Islam. China owns us as they are not fighting the Mohammed Islam threat, but we are going bankrupt doing it by ourselves.  Our Oval Office and Congress have realistically sold us out, and have no plan to bail us out, except to blame each other, and doing nothing. Our real enemy is the motly politicians we have elected, who keep burying us to a national financial disaster “that will make the Great Depression look like a hiccop.”

posted by: Joebigjoe | August 30, 2014  5:23pm

Question Mark I agree with every word you said. We have been sold out. I’m just trying to ‘splain basic economics to the living wage crowd that they may think they are fighting for the right thing on jobs that cant be done from offshore but there is automation that will take these jobs if they make that cost gap too close.