Slow wage growth, an increasing reliance on low-wage jobs, and “persistently high unemployment” among minorities and workers without a college degree are threatening Connecticut’s long-term well-being, according to the annual Labor Day report from Connecticut Voices for Children.
The liberal, New Haven-based public policy research group also recommended that Connecticut bolster its state tax credit for the working poor, raise the minimum wage to $15 per hour, expand early education programs and reform the municipal property tax system.
“Changes in the state economy pose challenges for low-wage workers seeking to give their children the best possible start in life,” said Ellen Shemitz, executive director of Connecticut Voices.
According to the report, nearly half of all jobs created in Connecticut since the last recession ended are in low-wage industries. And since 2001, the share of industries that pay low wages has increased by 20 percent.
Further complicating matters, workers from racial and ethnic minorities and those without a college degree face unemployment rates three times those of whites in Connecticut.
Minorities median hourly wages stand between $7.25 and $8 per hour less than those of whites in Connecticut.
“Connecticut’s job swap has implications for individual family economic well-being and for the state’s overall revenue sufficiency,” said Derek Thomas, a fiscal policy fellow at Connecticut Voices. “The first decade in the 21st century — which includes the loss of manufacturing jobs in the early 2000s as well as the vast job losses during the Great Recession — has left the state with a sizeable high-wage jobs deficit.”
Ray Noonan, an associate fiscal policy fellow who — along with Thomas — co-authored the report, added that the growth of low-paying jobs “is a double-whammy for working families. Not only do they pay less, but they also lack the benefits, predictability and flexibility of jobs past.”
To counter some of these problems, the report recommends that Connecticut restore its state earned income tax credit from 27.5 percent to 30 percent of the federal EITC.
Connecticut’s credit was established in 2011 at 30 percent and then trimmed to 27.5 two years later — a move that cost poor working families about $10 million per year. The reduction was supposed to be temporary, but Gov. Dannel P. Malloy and the legislature suspended the planned restoration in 2015 to help close a state budget deficit.
Another major recommendation in the report involves boosting the Connecticut minimum wage to $15 per hour. The state’s minimum wage currently stands at $9.60 per hour and is slated to rise in January to $10.10 under legislation enacted in 2014.
Connecticut is tied with Vermont for the sixth-highest hourly minimum wage behind: the District of Columbia, $11.50; California and Massachusetts, $10; Alaska, $9.75; and Washington state, $9.67.