Donovan’s minimum-wage compromise: $8.75, not $9


House Speaker Christopher G. Donovan, D-Meriden, backed away Thursday from his proposal to raise the minimum wage by 75 cents on July 1, a month before his expected primary for the congressional nomination in the 5th District.

With Donovan’s consent, the Labor and Public Employees Committee voted 8-3 for a revised bill that would raise the $8.25 minimum wage by 50 cents in each of the next two years, with future raises automatically indexed to the consumer price index.

The original proposal by Donovan would have raised the minimum wage by 75 cents on July 1, 2012 and another 75 cents a year later, potentially giving Connecticut the nation’s highest minimum wage in 2013.

It essentially was an opening position in a negotiation. The import of the labor committee’s vote Thursday was it signaled Donovan’s bargaining position as he tries to generate support in a lukewarm Senate.

Not only is the proposed raise cut by one-third, the effective date was delayed from July 1 to Jan. 1.

“It’s great to get it out of committee. It’s a good strong bill coming out of committee. It’s a fair minimum wage,” Donovan said.

Sen. Edith Prague, D-Columbia, the co-chairwoman of the committee, was unsure about the bill’s prospects in the Senate, saying she assumed that Donovan and Senate leaders are in discussions.

But Donovan said, “We really haven’t talked about specifics.”

Senators have said privately that the original proposal had little support. It was unclear today if the revisions would attract votes.

Prague urged support, even as she acknowledged an ucertain economy. She noted that economists had testified that the minimum-wage increase would boost economic activity.

“All the economists I know don’t run a payroll,” said Rep. Craig A. Miner, R-Litchfield. “I don’t take an economist’s view as gospel.”

Rep. John B. Rigby of Winsted, the ranking Republican on the committee, said, “Higher wages mean higher prices.”

Prague said most data show that any increase in the minimum wage quickly flows back into the economy.

“I will venture to guess it will do more good than harm,” Prague said.

The National Employment Law Project released a report today saying that most minimum-wage workers in Connecticut are employed by national chains, not the mom-and-pop businesses that generate the most concern at the State Capitol.

Five employers, including Walmart and McDonald’s, have 30,000 employees in the state making the minimum wage, the advocacy group reported.

Connecticut’s current minimum is the fourth highest in the nation behind Washington’s ($9.04), Oregon’s ($8.80) and Vermont’s ($8.46) — three of the 10 states that automatically index their minimum to the cost of living.

Gov. Dannel P. Malloy and Senate Democratic leaders have questioned raising the minimum wage this year. Last year, the legislature created an earned income tax credit that they see as a more effective, targeted boost for the working poor.

But Donovan has the ability to bring the bill to a vote in the House, where passage is expected. A minimum wage bill dying from inaction on the Senate calendar in an election year would be politically awkward for Senate Democrats, most of whom enjoy labor support.

If the bill passes, the automatic indexing of future minimum wage increases would begin in the summer of 2014, when the state would calculate an increase based on the consumer price index. The new rate would take effect Jan. 1, 2015.

The bill was approved by seven Democrats and one Republican: Sen. Anthony Guglielmo of Stafford. Before the vote, Guglielmo supported an unsuccessful effort to eliminate indexing from the bill.

At a news conference last month, Malloy declined to endorse or oppose Donovan’s original bill, which would have raised the minimum to $9 on July 1 and $9.75 a year later.

“I’ll review the testimony, the evidence that’s given. And no, I’ve not reached any conclusion,” Malloy said. “I am a supporter of minimum wage, as you well know. I’m also a supporter of benchmarking and understanding what our competition is doing.”

By competition, Malloy means New York, Massachusetts and Rhode Island. All have lower minimum wages.

Twenty-three states equal the federal standard of $7.25, including New York and New Jersey. Connecticut is one of 18 that exceed it, five of which are in New England: Vermont, Massachusetts ($8.00), Maine ($7.50) and Rhode Island ($7.40). New Hampshire is at the federal minimum.