The Annual Minimum Wage Debate, With A Twist

by Categorized: Jobs, Labor, Poverty Date:

The year’s first hearing on Connecticut’s minimum wage is happening at the state Capitol Thursday afternoon, and the battle lines are unchanged from 2012, with a twist.

Again this year, advocates — led by Connecticut Working Families, which rolled out its coalition before the hearing — are pushing for more than they will get.  The main bill calls for the minimum to rise from the current $8.25 an hour to $9, then $9.75 a year later. Then it would be indexed for inflation.

The minimum wage has basically tracked inflation since 1950 but as each year passes without an increase, the wage falls behind. The two increases shown on the far right were last year's proposals, which failed -- not the actual wage.

The minimum wage has basically tracked inflation since 1950 but as each year passes without an increase, the wage falls behind. The two increases shown on the far right were last year’s proposals, which failed — not the actual wage.

That would catapult Connecticut ahead of Oregon, at $8.95 the state with the highest minimum. As it stands now, just 16 states have pay floors higher than that of the federal government, which is at $7.25 for the fourth straight year.

It’s more likely that the debate at crunch time will come down to more modest raises of 25 cents a year, and even that will be a battle, just like last year when the votes fell short in the state Senate.  States are falling over each other to squeeze low-wage workers and pour money into the hands of businesses, and the business lobby won’t let Connecticut lawmakers stand as outliers.

The difference this year is pressure that can’t be resisted any longer. We’ve now had the same minimum for four years, and Massachusetts is into its sixth year at $8.  New York and New Jersey, which match the federal level,  are also due for increases and the pressure will be great in those states.

(Click here for the state-by-state chart going back to 1968.)

 

So, even if you believe in keeping low-wage workers right where they are, a 25-cent raise would do exactly that because costs are rising.

Economically, it makes sense to raise the minimum to a level that allows people to get by, for obvious reasons.  We’re not talking about raising taxes here, so there’s no argument that it would drain the economy.

On the contrary, everyone knows that poor people spend every dollar they have, boosting the economy, while companies have to be begged, bribed and cajoled to invest even if they have huge troves of cash.  You can’t blame them, but there comes a time when we have to think about the economy.

There’s no viable argument that raising the minimum creates an onerous burden for businesses. That’s just silliness, disprovable with simple math. The trouble, of course, is that no state can afford to be too far out front on the wage, so economic logic falls flat when we give companies one more little reason to flee, or to not come here.

So it’s a game of chicken.  That the hearing came at the same moment when Gov. Dannel P. Malloy was in East  Hartford announcing $1.5 billion for science, math and technology at UConn, is a pairing that should be lost on no one. We spend freely to build up crucial strengths in some areas but not others.

What’s needed is a raise in the federal minimum, which would narrow the penalty on Connecticut for doing the right, and smart, thing.  And we could end this recurring idiocy by indexing the minimum wage to inflation once and for all.

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8 thoughts on “The Annual Minimum Wage Debate, With A Twist

  1. John Patton

    Mr. Haar, Please explain how many paychecks you have signed on the front and then lecture me about what business owners should and should not pay employees. Raising the minimum does not create a burden for businesses but it most certainly creates an imbalance between what value an employee brings to the business and how much it costs an owner to keep them employed. Your newspaper was just complaining about the lack of entry level jobs in this State. Maybe you should take your simple math and see if there is any correlation.

  2. Aaron

    Mr. Patton,
    Please tell me how many years you’ve lived working minimum wage, and exactly what kind of work you have your employees doing that makes you feel that it’s okay to pay them less than what it costs to stay alive in the state that they work. We’re not talking two cars and a house, we’re talking an apartment, taking the bus, and barely being able to afford the groceries you need. Maybe you should take a look at the amount of money you take home each month, subtract what your average employee makes in the same time, and then tell me honestly if you’re working that much harder than them.

  3. John Patton

    It’s irrelevant to the conversation but since you asked Aaron, I worked two years on farm wages before I upgraded to minimum wage where I stayed for another couple of years. Using your logic, shouldn’t business owners provide enough money for a car if there is no bus service? If I am a business owner and I don’t take any money home at the end of the month (sometimes you have to put money in) should I be able to expect money back from my employees? Despite your good intentions, your logic is a perversion of the wages paid for services rendered. If there is a difference between the value created by a person or position and the cost associated with keeping that position, then eventually those positions (jobs) will go away. Aaron, you should try employing people. Save your money, invest it in your business – hire people, supervise them, and pay them what you want. You might understand what it’s like to scrape up enough money to make payroll at the end of the week. Do that long enough until you finally are at the point where you take home more money than your employees. Then, let me know your feelings when someone who knows nothing about your business tells you what you should pay your employees. Have a good day, I’ve spend enough time on this.

  4. old capitalist

    To all the idiots looking to fix this idiocy. Why don’t you push for a $100 hour minimum wage, which according to your moronic reasoning would greatly boost the states economy and eliminate poverty.

  5. Really?

    Could this be more dismissive of legitimate arguments against raising the minimum wage? Price floors create product surplus. The labor market is no different. The higher the floor, the lower the demand and higher the surplus. I think the economy is better served by two jobs paying $8/hr than one job paying $10/hr.

    And please don’t suggest that this UConn largess will come “freely.” On whose backs? The same folks you’re asking to pay higher wages too?

  6. george pappa

    Minium wage jobs are a boot camp position, not a career. I realize some workers are quote, unquote stuck at those jobs for many reasons like, not being able to work full time. The employers of businesses are not just hit with the increase of the wage hike. They have to match social security and medicare deductions dollor for dollar. Their unemployment compensation goes up in cost and their insurance, as well, times the number of workers adds up. When this happens, businesses look to replace woekers with machinery.

  7. L

    Maybe if wages were higher, people would want to work instead of sitting around living on unemployment because theyd lose money, have to work weekends etc if they willingly accepted a minimum wage job. People in non minimum wage jobs have just as low quality of life since taxes, gas prices and health insurance in CT are the highest in the country.

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