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February 11, 2019 Other Voices

$13 is magic number for CT's minimum wage

Greg Kraut
By Greg Kraut

Any mechanic will tell you, don’t put gas in the engine until the engine is fixed. Connecticut’s economic engine is still broken, so why the rush to put “gas” in it, in the form of a $15 minimum wage, when it still needs fixing?

I am all for a proper minimum wage that should be a peg of a local minimum to approximately 50 percent of the local median wage, which is where other advanced comparable nations are currently. But jumping to $15 per hour would constrict economic growth.

In the 1960s and 70s the minimum wage in the United States was at that 50 percent rate and then hit a low in 2013 at approximately 40 percent at $7.25. By increasing the minimum wage too quickly, and above the appropriate metrics, it will do more harm to the people that need it most by the way of less business opportunities as companies will close up shop -- or hold off on more hiring -- at a greater pace.

In actuality, the minimum wage is way too low in most places, but it is now trending to be a bit too high in other places. Minimum wage varies from state to state, even community to community, from approximately $8 in New Jersey to $15 in New York City. Long Island and Westchester will be at $15 by 2021. The median wage in New York City is approximately $26, so even New York City is now too high.

Connecticut is currently at an average of $10 per hour. The median wage in the Hartford metro area is roughly $22, so we should be at approximately $12. Contrast this to the federal minimum wage, which is too low at $7. Applying a methodology of the local median wage, the federal minimum wage is too low for over 80 percent of the nation’s metro areas. 

Gov. Ned Lamont and leaders from both parties in the Connecticut legislature have publicly supported a $15 minimum wage. But based on what information? Are wages rising? Are businesses flocking to our state? The only positive thing I see about raising it to $15 immediately would be in higher payroll taxes.

We should all remember U.S. House Speaker Nancy Pelosi boasted last year that a $15 minimum wage would pass “in the first 100 hours” of a Democrat-controlled Congress. In his 2013 State of the Union address, President Barack Obama identified a $9 federal minimum wage as ideal; by the following year, Democrats had rallied around $10.10.

In 2015, Virginia Democratic Rep. Bobby Scott’s Raise the Wage Act proposed a $12 minimum wage. In 2017, 23 Senate Democrats led by Vermont Sen. Bernie Sanders introduced their own Raise the Wage Act, embracing the $15 figure popularized by the Service Employees International Union.

I would support increasing the minimum wage in annual steps from the current $10.10 to $13 per hour by 2022, starting with an immediate move to $12. I agree by the approach recently taken in New York, which provides for a slower implementation for smaller companies, and we should consider potential reductions by age (as they have in 13 European countries), full or part-time status, a region of the state, and other factors.

Read more

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