The top Democrats in state government joined labor leaders Monday to highlight the minimum wage hike that takes effect this week, calling it a major step to help lift thousands of Connecticut households out of poverty.
And Gov. Dannel P. Malloy also pledged his support for a proposal circulating among some Democrats in Congress to raise the national minimum wage — in several stages — to $10 per hour.
Connecticut’s minimum wage of $8.25 per hour, which already tops the federal threshold wage by $1, will jump by 45 cents Wednesday to $8.70, in accordance with a statute enacted by the General Assembly seven months ago. That measure also calls for the state’s minimum wage to grow to $9 per hour Jan. 1, 2015.
“As the clock strikes 12 in this state, many people … will actually lift themselves out of poverty,” Malloy said during a midday rally in the Capitol’s Old Appropriations Room.
The governor said 70,000 to 90,000 workers, of a total workforce of 1.7 million, earn the minimum wage.
The current hourly rate of $8.25 represents $17,160 per year for an individual working 40 hours per week. Those annual earnings fall $1,200 below the federal poverty level for a family of three.
The 45-cents-per-hour minimum wage increase represents an extra $18 per week. “That could put some extra food on people’s tables,” said Lt. Gov. Nancy Wyman. “To these families who are trying to survive, this is really a blessing.”
But a spokesman for the state’s chief business lobby said the minimum wage hike will not help Connecticut’s struggling small businesses.
“We know it is well-intentioned, but it actually ends up hurting the people it’s designed to help,” Eric Gjede, associate counsel for the Connecticut Business & Industry Association, said.
Many small businesses cover the higher minimum wage cost by reducing the number of employee hours they will pay, Gjede said. Others will pass the cost along to their customers through higher prices.
But one small business owner from Hartford came to the Capitol Monday to endorse the increase.
“We understand that when our costs go up, so do those of our employees,” said Rondelynn Bell, co-owner of Niro Design Center on Pratt Street, which provides fashion design and retail management training.
Bell, who has four employees, said there is a growing recognition that struggling families will spend this increase on basic needs, thereby bolster the economy. “Everybody from the pope to the president is talking about how important this is,” she said.
The Connecticut minimum wage hike, which passed without any Republican support in the Democratic-controlled legislature, is part of a larger effort to reverse an overwhelming national trend toward income inequality, legislative leaders argued.
Senate President Pro Tem Donald E. Williams Jr. of Brooklyn and House Speaker J. Brendan Sharkey of Hamden cited state subsidies to help small businesses expand and the new state Earned Income Tax Credit as efforts that complement the minimum wage hike.
“The economy has improved, slowly but steadily,” Williams said. “But today, income equality is far worse.” And the inequality falls disproportionately hard on women, African Americans and Hispanics.
“We are now in a (national) race to the bottom that sends huge profits to a few while exploiting the many,” Williams added.
But Sharkey predicted that Connecticut’s two-stage minimum wage hike would bolster the effort to raise the nation’s minimum wage. “Connecticut has really led the rest of the country on critical social issues,” he said.
President Obama recently offered his support for a bill in Congress that would raise the federal minimum wage from $7.25 to $10.10 in three stages over the next two years.
The president of the Connecticut AFL-CIO, Lori Pelletier, called the recent state initiatives “meaningful steps. Every little bit helps.”
But Pelletier added that Connecticut is fighting national trends toward inequity that have been building for years. “We could do more,” she said. “We shouldn’t ever have to settle for people working for slave wages.”