Op-ed: Raising the minimum wage: A good start, but not enough

Tom Swan, executive director of CCAG

Tom Swan, executive director of CCAG

It’s great news and excellent economic policy that Gov. Malloy and the legislature have raised Connecticut’s minimum wage to $10.10 by 2017. This will put money into the pockets of Connecticut families who will in turn spend it, thus stimulating our economy.

However, raising the minimum wage is not enough to address our staggering inequality or the needs of our families. A recent report by the National Low Income Housing Coalition points out that a full-time worker would need to make $23.02 an hour to afford a two-bedroom Fair Market apartment in Connecticut. Another report, from November 2013 by the Connecticut Association for Human Services (CAHS), found that a family of four with one full-time and another half-time wage earner, each making $10 an hour, would be eligible for nearly $30,000 in public assistance because of our state’s high cost of living.

Op-ed submit bugToo much of our debate is around how expensive public assistance programs are rather than about how large corporations make huge profits by paying such low wages. Large corporations should either increase the pay of their workers or help pay for the programs that they and their employees depend on.

We know that big, wealthy companies like Walmart and McDonald’s employ the largest number of wage earners on public programs, and that many of these companies have been intentionally implementing policies to shift the costs of their workers’ needs onto public programs. A recent report by the Democratic staff of the U.S. House Committee on Education and Workforce says that the low wages paid by Walmart resulted in a public subsidy of between $900,000 and over $1.7 million per each superstore in Wisconsin. With several dozen Walmart stores in Connecticut, taxpayers are subsidizing one of the world’s largest corporations to the tune of tens of millions of dollars every year.

Fortunately, Connecticut’s legislature is considering a proposal that would require big companies to either increase the pay of their workers or to pay a fee to the state to offset their public subsidy by the state. It is a smart and fair policy. The state budget will improve: We’ll either have fewer people needing to sign up for public assistance, or we’ll have a corporate paid revenue stream to help pay for necessary programs. In addition, it levels the playing field for small businesses who cannot socialize their costs as these large profitable businesses are doing.

Connecticut has taken a good step to address inequality. Now it’s time to take the next – pass HB 5069: AAC Low Wage Employers.

Tom Swan is the executive director of the Connecticut Citizen Action Group (CCAG).

 

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