Labor Advocates Back Bill To Fine Large Employers Paying Less Than $15 An Hour
by Christine Stuart | Apr 9, 2015 4:00pm
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Posted to: Business, Child Welfare, Equality, Town News, Hartford, Middletown, New London, Jobs, Labor, Nonprofits
A Hartford daycare was the backdrop Thursday for a press conference on a union-backed bill that would fine large employers who pay their employees less than $15 an hour.
It’s a bill that would catapult Connecticut back onto the national stage for being the first state in the nation to institute such a fine on companies with more than 500 employees. Connecticut made the national spotlight in 2011 when it approved paid sick day legislation and it was the first to pass legislation last year to raise the minimum wage to $10.10 an hour by 2017.
Legislation backed by labor advocates this year seeks to fine big corporations like Wal-Mart $1 per hour for each employee paid $15 per hour or less. The fiscal note estimates that about 146,710 of the 743,328 employees who work for companies with at least 500 employees would be covered under the bill. The bill would result in a revenue gain to the state of up to $152.6 million in 2016 and $305.1 million in future years.
Proponents of the legislation say that because these 146,710 employees are underpaid, they are forced to rely on state programs and subsidies for health insurance and childcare. Since funding is on the chopping block this year for those subsidized programs, they are hoping the new revenue from this legislation will help fill in the gap.
“This is how we’re going to have a middle class in America,” state Rep. Peter Tercyak, D-New Britain, said.
Sen. Ed Gomes, D-Bridgeport, Tercyak’s co-chairman on the Labor Committee, said there are 29,000 millionaires in the state of Connecticut where the minimum wage won’t be $10.10 an hour until 2017.
“People who working for minimum wage can’t even afford a decent apartment,” Gomes said.
He said he understands they have a long way to go to rebuilding the middle class, but his constituents can’t wait until the minimum wage gets increased. He said this bill, which levies a fine on large employers, will help because it holds large corporations accountable.
“Why should these employees have to rely on state assistance to feed their families?” Gomes said.
But business organizations and the conservative Yankee Institute for Public Policy say the legislation will hurt Connecticut’s business climate.
“Taxing businesses that either can’t or don’t pay $15 per hour guarantees only one thing: Fewer jobs for the people who need them most,” Yankee Institute President Carol Platt Liebau said Thursday.
Tercyak bristled at the notion that it was a tax.
“It’s just paying your fair share,” Sen. Marilyn Moore, D-Trumbull, said. “We see it as them just paying their fair share. We’re not calling it a tax.”
Whatever it’s called, Liebau said it doesn’t matter what the legislature does. The big companies it is targeting — like Wal-Mart and fast food chains like Burger King — will be fine because they will “cut jobs, automate, or follow the lead of so many other businesses and leave Connecticut altogether. But employees will suffer if this bill passes, and that is wrong.”
Eric Gjede, assistant counsel at the Connecticut Business & Industry Association, said the legislation likely will lead to big businesses cutting back workers’ hours, but beyond that it will have a profound impact on the business climate in the state.
“Businesses across the county look at legislation like this and make the choice to grow their business elsewhere,” Gjede testified last month. “The result is lost job opportunities for Connecticut citizens, and the loss of good corporate citizens that give back to their local communities.”
Local elected leaders don’t see it that way.
“It’s about building the economy from the ground up,” Middletown Mayor Dan Drew said.
He said it’s about making sure that people who go to work every day to support their families can work without falling into poverty.
“Nobody should be working as hard as people work and still be in poverty,” Drew said. “You shouldn’t have to work 40, 50, and 60 hours a week and not make a living wage. It’s just morally wrong.”
Labor advocates are planning to hold a rally on April 15 to show their support for the legislation.
Tags: low-wage workers, Wal-Mart, labor union, paid sick days, childcare, Peter Tercyak, Ed Gomes, Marilyn Moore, dan drew, Carol Platt Liebau, dh
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Comments
(10) Archived Comments
posted by: justsayin | April 9, 2015 8:20pm
there is so much wrong here it is hard to read. Why would the fine double in the second year? The guy they voted for Danny-boy is cutting their programs and they want business to pick up the tab. So now $15 is middle class? This is a silly money grab idea that hurts more than it helps.
posted by: somersct | April 9, 2015 9:33pm
why stop at $15. lets just make it $40,$50. lets just round it up to $100.
posted by: Tartan Rooster | April 9, 2015 10:22pm
A money grab is right. May also be a cry for attention because they can’t be serious if they think this is going to happen.
posted by: art vandelay | April 9, 2015 10:30pm
This is totally absurd, so absurd that it’s not even worth going into detail. No government should dictate what a private company pays it’s employees. If a potential employee does not like the wage they are being paid for a particular job, they are free to look elsewhere.
I’m also getting sick and tired of the liberal progressive socialists using the term “paying your fair share” They never define what a fair share actually is. I wish they would stop using it.
posted by: LE 2015 | April 9, 2015 10:58pm
If a business has 50 people making $10 per hour and you raise it to $15 that is an increase cost of $250 per hour times 8 hours per day is $2,000 per day with 250 work days you are talking $500,000 per year. Plus additional FICA and Medicare expense for the employer. Look for business to leave CT
posted by: Lucid | April 10, 2015 9:55am
Can someone here explain the difference between a person who works, pays taxes and get food stamps or medical because the job doesn’t pay a living wage vs a multinational corporation not paying workers a living wage and expects the government to pay the benefits, like food and health? Who’s the leech here? Just like our neighbors who are receive food stamps, medical or other benefits when needed, once they earn enough money they don’t get them anymore, why isn’t that the case for super large corporations who have plenty of profits or assets to pay for benefits and are taking advantage of every taxpayer in CT. Time for those companies to pay for what they are using. Either pay a fair wage or pay for the benefits they’re using. It’s only right and not bad business.
posted by: MGKW | April 10, 2015 1:18pm
Indeed, this is in the same thinking that pushed Tenet away from the table a few months ago…if the legislature passes this…you can kiss many of the remaining organizations we have good bye…
posted by: Uncommon_sense | April 10, 2015 8:36pm
So what is the purpose of a “minimum wage” if you are fined when you pay it?
posted by: JusticeNOW! | April 10, 2015 8:54pm
While I admire CNJ’s reporting I must ask for a correction in the header for this article, this would be a “fee” not a “fine” as the large employers would have a choice. This word is VERY important in driving this issue forward. Please consider a retraction or at least use “fee” in future articles regarding this issue. Thank you! Duste Dunn.
posted by: ocoandasoc | April 11, 2015 2:41am
Call it a fee, call it a fine, call it a tax… or call it what it really is… stupid. Can’t CT require that legislative members take a high school economics course? The pols are chasing their tails. Their actions are raising costs so quickly in the State that a living wage in CT is nearly 40% higher than a living wage in many other states. Push this insanity through and it will go even higher—$15 an hour won’t be enough. These fools forget that if a company were to raise the wages of every $10-an-hour employee to $15 an hour that they would have to give similar increases to all their other hourly employees. This proposed legislation is, of course, the work of the unions who practically own many of the dems in the legislature. They want to sock it to Walmart and the other large national companies whose employees don’t pay union dues. Yeah, it’s as simple as that. And don’t worry about national notoriety. If the legislature continues on the course they’re on Connecticut will get plenty of exposure on the news… when the State goes bankrupt.