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Minimum Wage Hearing: Painful Economy Is Common Theme

By DANIELA ALTIMARI

February 28, 2012

HARTFORD — Eva Lister and state Rep. Anthony D'Amelia are each struggling with the effects of a still-sputtering economy.

D'Amelia, a Republican who represents Waterbury and Middlebury, owns an Italian restaurant and recently had to lay off staff for the first time in nearly 30 years. "Forget making a profit,'' he told members of the legislature's labor committee Tuesday during a hearing on a bill that would raise the state's minimum wage. "We're just seeking to stay alive."

Lister, a single mother from Storrs who works in a coffee shop, has an advanced degree and once ran her own business. But she left the workforce to care for her ailing mother and has not been able to find a well-paying job.

She said she came to the hearing to put a face on low-wage workers. "We clean your hotel rooms, we care for your children ... we serve your coffee with a smile,'' Lister said. "Raising the minimum wage would have a huge impact.''

Their stories were among the dozens presented to the committee during a 5 1/2-hour public hearing on a bill that would increase Connecticut's minimum wage from the current $8.25 an hour to $9 an hour on July 1 and $9.75 in July 2013. When the hearing opened at 2 p.m., the crowd was standing-room-only, though it gradually thinned during the evening. Gov. Dannel P. Malloy said he has yet to decide whether to back the proposal, whose chief proponent is House Speaker Chris Donovan, a Democrat from Meriden who is running for Congress.

"I'll review the testimony and the evidence that's given,'' Malloy said at a press conference before the hearing. "No, I've not reached any conclusion."

The governor said he has to be mindful of how Connecticut's business climate compares with that of its "competition" — the neighboring states of New York, Massachusetts and Rhode Island. He also mentioned the earned-income tax credit and mandate requiring paid sick leave, two new policies that benefit minimum wage workers.

Supporters framed the wage increase as a matter of fairness. John Maher, who owns a package store in Berlin, said mom-and-pop shops that pay their workers well are rewarded with increased loyalty and hard work. "My partner and I know that our workforce is our strongest asset and we treat each of our employees with the dignity and respect that their work deserves,'' he said in written testimony presented to the committee.

But fairness to low-wage workers wasn't the only point pressed by advocates: They also emphasized the stimulative effects of a boost in the minimum wage. Unlike higher earners, those on the lower rungs don't sock their raises away in the bank but pour it back into the economy by spending more, they said.

"The best time to raise the minimum wage is in a recession,'' said Johnny Williams, an associate professor of sociology at Trinity College and an activist with the Occupy Hartford movement.

But other speakers asserted just the opposite. Kia Murrell, associate counsel of the Connecticut Business and Industry Association, said raising the minimum wage could boost unemployment by encouraging employers to automate; instead of hiring a high school kid to ring up groceries, she said, supermarkets would install a self-checkout lane. "For every study that says it's a good thing, you've got two that say it's a bad thing," she said.

And, at a time when many businesses are struggling, a bump in the minimum wage could be the hit that knocks them out, they said.

"This is not the right time for this bill to be appearing before us,'' D'Amelia said. "To do this now in this economy ... I can't stress to you how this sends the wrong message.''

But Sen. Edith Prague, co-chair of the Labor Committee, said the proposed wage increase could boost business at D'Amelia's restaurant. "If people have more money in their pockets, maybe they could go out to eat once in a while in your restaurant,'' said Prague, a Democrat from Columbia. "As long as people are working for poverty level wages, your business isn't going to survive.''

Paul K. Sonn, legal co-director of the National Employment Law Center, said opponents of raising the minimum wage often cite the burden on small businesses but many small businesses already pay their employees more than the minimum wage. The real opponents, Sonn asserted, are big national chains such as Target, Wal-Mart and McDonald's.

Several restaurant owners came to testify about an aspect of the minimum wage bill that apparently doesn't have much of a future. That provision would eliminate the "tip credit," which allows restaurant owners to pay bartenders and servers less than the minimum wage because tips bring hourly wages well above that level. Lawmakers said the provision was "drafting error" and will be removed as the bill moves forward.

Currently, only the state of Washington has a minimum wage higher than $9; at $9.04. Oregon and Vermont have higher minimum wages than Connecticut. The federal standard is $7.25 an hour.