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Lawmakers To Take Up Rell's Wage Hike Veto

By JANICE PODSADA | Courant Staff Writer

June 22, 2008

To cover the rising cost of living and attract employees, many Connecticut companies are giving across-the-board raises, in the range of 25 cents an hour, to lower-wage workers.

The General Assembly approved a similar pay raise this spring, overwhelmingly passing a bill that would boost the pay of minimum wage workers from $7.65 to $8 an hour beginning in January and to $8.25 in 2010.

Gov. M. Jodi Rell vetoed the 35-cent raise, though, saying she didn't want to "take any action that will negatively affect businesses or jobs during a national economic downturn."

Now, as lawmakers prepare to consider an override of Rell's veto in a special session Monday, the arguments mirror a long-standing, national debate about the wage for workers at the bottom of the pay scale.

In high-cost states such as Connecticut, companies that want to keep reliable workers over time must pay more than the minimum wage. The current spike in prices — especially for gasoline and heating oil — is forcing many of them to ante up. The issue isn't whether people can reasonably live here on the minimum; they can't.

The question is, how many people earning the smallest allowable paycheck are supporting themselves and family members? And for businesses such as fast-food outlets and stores, what would be the effect of a raise?

The business community says it's the wrong time to raise the minimum wage — in the midst of an economic slowdown, at a time when any increase could make the state's businesses less competitive. Many say it would lead to job losses, which would hurt the people it's intended to help.

Furthermore, business says it's unnecessary.

"If you talk to most small business owners, they already pay above minimum wage," said Andy Markowski, state director of the National Federation of Independent Business.

Supporters of raising the state's minimum to $8 an hour point to the fact that, adjusted for inflation, the minimum wage has been on a decline for years, and that Connecticut's lower-wage workers have fared even worse than their counterparts in other states.

Since 2001, Connecticut workers earning between the minimum wage and $10 an hour had the largest real wage decrease in the nation, according to a 2007 report issued by Connecticut Voices for Children.

"There's a pretty significant population that are depending on minimum wage jobs to pay their bills," said Jon Green, executive director of Connecticut Working Families.

"Many minimum wage jobs are part-time jobs, as well. And in today's economy, it's not uncommon for primary breadwinners to piece together two or three part-time jobs." There are, he said, "people who walk out of McDonald's and clock in at Burger King."

Rep. Bruce Zalasky, D-Southington, who supports raising the minimum wage, said that a disproportionate number — 67 percent — are women, many single mothers trying to support themselves and their children.

In 2007, Connecticut posted the highest per capita income in the nation, at $54,117 per person.

And while other states with lower per-capita incomes have raised the minimum wage to about $8 an hour, Connecticut's minimum wage hasn't changed since it reached $7.65 in January 2007.

"If you look at comparable states like Massachusetts and California, the amount the minimum wage would be raised to is not out of line," said Thomas Kochan, a professor of management at the Massachusetts Institute of Technology's Sloan School of Management.

"We don't know if we'll be coming out of this recession by January, so [raising the minimum wage] is off in the future," Kochan said. "It gives businesses time to plan and adjust. The general evidence is that modest increases in minimum wage don't have big unemployment effects."

The Connecticut Department of Labor estimates that of the state's 1.7 million workers, 65,000 earn minimum wage, while thousands of other workers earn from a few cents to a dollar more than the minimum.

The federal minimum wage is $5.85 an hour, but on July 24 it will rise to $6.55 per hour, then $7.25 in July '09."Connecticut has never been this close to the federal standard," said House Majority Leader Chris Donovan D-Meriden, a longtime supporter of higher minimums.

"Gas has gone up a buck a gallon in a year, and we're talking about raising the minimum wage 35 cents. It's money that's going back into the community, it's purchasing essentials."

Who Are They?

But who minimum wage earners are, and how long they earn it, are matters for debate.

Forty-seven percent of minimum wage earners are 16 to 24 years old, according to the U.S. Department of Labor.

"Those federal numbers mirror Connecticut's," said Markowski, the independent business group state director. "I think there are very few people who are supporting a household on minimum wage in Connecticut."

"People lose sight of the fact that minimum wage is a starting wage and oftentimes employers want to pay minimum wage for a trial period and then they'll give incremental raises or an overall raise after the worker has been trained or proves themselves on the job," said Markowski.

"Lots of companies, even fast food places, they'll start someone at minimum wage and after 90 days they'll bump them up 50 cents or even a buck an hour," said Peter Gioia, who tracks the economy for the Connecticut Business and Industry Association.

And today, very few employers can attract or retain workers if all they are offering is the state required minimum wage of $7.65 an hour.

"When I speak to potential employers, I tell them that if they raise their wages above the minimum, more people will be interested in the position," said Jennifer Beck, vice president of JobPro Staffing Services in Glastonbury.

Many employers say raising the minimum wage is a good idea in theory, but boosting it sends total labor costs soaring.

In summers, the Southington-Cheshire community YMCA employs high school and college age students at minimum wage as part of its day camp program, Executive Director John Myers said.

"The majority of our folks aren't minimum wage workers. But any time we have an increase in the minimum wage, we have to raise rates for everyone. We have a classification system, and the difference between the rates would narrow. We'd have to raise everyone's wages to keep everything consistent," he said.

"This isn't a good time. This is a year in which people are watching their wallets. At some point, we would have to pick up the cost and that would be pretty tricky."