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February 22, 2019

Minimum-wage hike scored as bad for business

PHOTO | New Haven Biz CBIA CEO Joe Brennan speaks to GVCC breakfast Friday morning in Shelton.

Raising the state's minimum wage to $15 an hour is likely to cost jobs for those who need them most — workers at the low end of the socioeconomic and job-skills spectrum, business leaders asserted Friday.

"Poor people are the [workers] who are most likely to lose their jobs through automation," said John S. Traynor, executive vice president and chief investment officer for People's United Bank. Traynor spoke Friday morning to a group of about 150 business people at an "Economic & Investment Outlook" breakfast event at the Shelton Courtyard by Marriott. The event was presented by the Greater Valley Chamber of Commerce (GVCC).

Traynor's thoughts were seconded by Joe Brennan, president of the Connecticut Business & Industry Association (CBIA).

"In the past when we [in Connecticut] talked about minimum-wage increases, we were talking about 25-cent or 50-cent [per-hour] increases," Brennan said. Raising the hourly wage by nearly half from its current $10.10 would be a "a different animal, a much more dramatic measure" that would negatively impact small businesses in particular.

Brennan also said he had heard from a number of Connecticut manufacturing companies who expressed concerns about attracting entry-level workers to manufacturing jobs with steep learning curves. "How can I attract new [workers] who can now work at a much easier job — say, in the fast-food industry — for the same $15?"

Proponents of raising the minimum wage assert it would stimulate the economy and better allow workers to support themselves, so they would be less reliant on social programs.

Temp, summer jobs at risk

Brennan added that the other employment sector likely to be most dramatically impacted by the wage hike was temporary employment, including summer jobs.

Traynor added that another "unintended consequence" of a minimum-wage hike to $15 would be "to push automation [implementation further and faster," especially into industry sectors that employ large numbers of low-skilled workers, including fast-food restaurants and grocery stores, he said.

Another element of incoming Gov. Ned Lamont's proposed state budget that drew wide criticism was the controversial proposal to reintroduce tolls to Connecticut highways.

Originally proposed as a levy on tractor-trailers only — which would have raised a projected $200 million annually — the proposal has since been broadened to include all vehicles on all major Connecticut thoroughfares, even including non-interstate highways such as the Merritt and Wilbur Cross parkways. That more comprehensive levy would net the state some $800 million in new revenue annually, but Brennan said many in the business community feared that those dollars would simply disappear "into the black hole of government" without offsetting other taxes, reducing the budget deficit or even slowing state spending.

In general, Lamont's budget approach relies "too much on revenue increases and not enough on reductions in spending," said Brennan.

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