House Democratic leaders said Tuesday they intend to call a vote tomorrow on a bill gradually raising the $10.10 minimum wage to $15 over four years, but some lawmakers continued to wrangle over how the measure should apply to young summer help and restaurant workers who largely rely on tips.
Democrats on the Appropriations Committee endorsed a minimum-wage bill on a 32-19 party-line vote Tuesday, clearing the way for House action on a revised version negotiated with the administration of Gov. Ned Lamont, a Democrat who has insisted on changes easing the impact on businesses, particularly restaurants.
The bill approved by Appropriations would raise the minimum wage to $15 in just three years, requiring a jump of $1.90 in the hourly minimum to $12 on Jan. 1. But Democrats have acknowledged for months that Lamont would prevail on a four-year implementation, bumping the minimum to $11.25 in January, followed by increases of $1.25 in each of the following three years until reaching $15 in 2023.
After 2023, the minimum wage would be pegged to the Employment Cost Index, a measure of wage growth calculated by the federal Bureau of Labor Statistics.
Lamont wanted to expand a provision of the minimum-wage law that allows a lower training wage for a limited period. Under a compromise, legislators said, the lesser wage would be limited to workers ages 16 and 17, allowing businesses to pay young help a wage 15 percent less than the minimum for up to 90 days.
“This is a work in progress,” said Sen. Cathy Osten, D-Sprague, the co-chair of Appropriations.
Still under negotiation was whether language favored by the administration would dictate how the minimum wage would apply to wait staff and bartenders, who receive tips. House Democrats emerged from an early-evening without final language on the tip credit, but House Speaker Joe Aresimowicz, D-Berlin, said he still expected a floor vote on Wednesday.
“That’s still the plan,” he said.
Aresimowicz had declared before the Appropriations meeting began that regardless of whether the committee endorsed a bill on Tuesday, the full House would debate a minimum-wage increase bill on Wednesday.
The bill approved by the Appropriations Committee is the version developed by the Labor and Public Employees Committee. Intended as a counter-offer in negotiations with the administration, it would have raised the minimum wage from $10.10 per hour to $15 per hour in three annual increments starting next January and finishing in January 2022.
The measure would maintain the “tip credits” assigned to certain occupations. Employers could continue to discount wages to restaurant and hotel wait-staff by 36.8 percent. Based on a $15 minimum wage, these workers would receive a $9.48 hourly wage plus tips. For bartenders the discount would remain 18.5 percent, meaning they would receive a minimum wage of $12.22 per hour based on a $15 minimum wage.
Another component of the revised measure would align the new minimum wage with the Consumer Price Index after January 2023, allowing for annual adjustments to reflect changes in inflation without legislative action.
“The lower-paid workers in the state shouldn’t have to look to the State Capitol each and every year for a raise,” Aresimowicz said.
Rep. Gail Lavielle of Wilton, ranking House Republican argued the inflationary index component would place constant annual pressure on too many Connecticut businesses to drive up wages.
“Do you happen to know a time in recent memory when the CPI went down?” she asked.
“It’s going to bankrupt them,” said Sen. Craig Miner, R-Litchfield, referring to the original three-year implementation schedule. “This is too far, too fast.”
It also has been off the table for months, according to Democrats involved in the negotiations.
Rep. Jay Case, R-Winsted, predicted the higher minimum wage would reduce staffing levels at nursing homes and nonprofit community providers that serve the developmentally disabled.
“I feel like this is a working document that’s not finished,” said Sen. Heather Somers, R-Groton.
But many Democrats on the committee joined the speaker’s argument that Connecticut has allowed its minimum wage to lag behind the cost of living for far too long.
“The reality is people can’t survive on $10 an hour,” said Rep. Cathy Abercrombie, D-Meriden.
Assuming an individual earning the $10.10 minimum wage works 35 to 40 hours per week, they would exhaust all of their funds just covering rent and food costs, said Rep. Toni E. Walker, D-New Haven, the other co-chair of the Appropriations Committee. “That doesn’t leave room for any quality of life I know of.”
But some Democrats did push for further modifications to the minimum wage measure. Osten said she’s worried that unless some accommodation is made, restaurants and other small businesses could be harmed.
And Sen. Joan Hartley, D-Waterbury, said the measure should reflect, in some fashion, Connecticut’s slow recovery from the last recession. “It must be formed in the overall conversation of where we are as a state,” she said.
A large professional economics literature dating back many decades on minimum wage suggestsbenefits for those continued employed at higher wages. But usually reduced employment opportunities for those seeking minimum wage work as employers tend to reduce staffing outlays. Given CT’s decade long stagnant economy boosting the minimum wage is akin to an employment tax and unlikely to create employment gains. Raising taxes and minimum wages are not usually prescribed to invigorate stagnant economies. For CT’s long depressed economy boosting the minimum wage is just another tax on business.
As multiple cities have found, businesses will close, employees will be cut, hours will be cut. There is no way that someone working a non-skilled entry level job produces $15/hr plus other payroll charges to the employer worth of value.
Gradually? a 25% increase a year for four years is not gradual!!
Since our state is doing so well financially, why not pile on a new unfunded mandate to small businesses and non profits? That idea should nicely complement increased taxes, tolls, and a new paid medical leave law. As long as the 100,000 state worker/retirees are taken care of, the other 3.4 million of us should have no problem with these most excellent new policies.
I look forward to seeing how all these tax and spend ideas bring new economic prosperity to our state.
Will be cheaper to buy food and items on Amazon and have it delivered. Otherwise get ready to pay $75 for a small pizza.
The new minimum wage should be phased in as slowly as possible.
Some companies will need time to close down in an orderly way.
Some companies will need time to merge with larger companies.
Some companies will need time to implement procedures to hold down hours worked.
It’s possible the total payrolls in the state won’t change much.
Which is okay. When the CBO looked at an increase in the national minimum wage, it found that the net gain in income nationwide would be a minimal amount, $19 billion if I recall correctly. The reason was, most pay to minimum wage employees reduced income to employers, whose business was reported using regular forms. The federal law has changed since, but the principle hasn’t.
An increase in the minimum wage is one of those apparently good ideas which don’t do as much good as intended.
WalMart disclosed today its average wage nation wide was $13.69 or twice the Federal minimum.
With initial hires at $10. And its eating up the competition. If CT goes to $15 its not clear those who would benefit would be offset by those not hired or loosing work.
WalMart also disclosed its store managers earn $175k. By that standard CT’s Mayors look overpaid.