Rell: Minimum Wage Hike "Reasonable"

Bill would Raise the Minimum Wage to $7.65/hr

In yet another move unlikely to win her friends in her own party but seemingly designed to secure her re-election, Gov. Rell said Monday that she supports a bill currently pending before the Senate that would raise the state's minimum wage to $7.65 per hour.

"I think the minimum wage bill, as it has gone through, is a reasonable one," said Rell, who had declined to comment when the bill was passed last week. (Keating)

During the debate, House Republicans repeatedly decried the measure, saying the bill would eventually hurt low-income workers because employers would be forced to lay off employees due to rising labor costs. In addition, other workers who currently earn more than the minimum wage would demand higher pay as their lower-paid colleagues received increases, Republicans said.

Rell, though, largely dismissed many of those arguments, saying that few workers actually earn the minimum wage in Connecticut.
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..."Those companies [that pay minimum wage] understand what their responsibilities are to their employees, and if that is the case and they aren't complaining about it, then I don't think that they believe that they will lose jobs because of it. Long-term, it could be a different story if you were changing [the wage] dramatically, but not at the rate they're proposing." (Keating)

Essentially, Rell believes that both the wage hike and the pool of workers making minimum wage is too small to have the kind of serious economic impact members of her party always claim whenever this debate comes up.

And, as far as I can tell, she's absolutely right. I have never seen a shred of evidence that raising the minimum wage has ever caused massive layoffs or widespread economic devestation. Besides, the rising cost of essentials like food and gasoline means that our dollars don't go as far as they used to. An increase in the minimum wage is not only morally sound, but necessary to keep pace with the cost of living in Connecticut.

But let's take a look at the numbers, just to address the arguments of small business owners like Rep. Anthony D'Amelio, who says that:

...raising the minimum wage could force him to lay off employees in the small restaurant he owns. Young workers who clean tables in the restaurant are paid the minimum, he said.
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"It's not going to help people," D'Amelio said of the increase. "You are going to hurt the very people you seek to help." (Keating)

The wage will be rising from $7.10/hr to $7.65/hr. Say you have an employee who works eight hours a day, which is pretty standard. That means he or she will get $4.40 more per day. If this workers works a standard 40-hour workweek, he or she will make $22.00 more per week than he or she used to ($284 to $306). If this worker works 50 weeks per year, he or she will make $15,300 instead of $14,200, an increase of $1,100.

Is that hard for a small business to bear? It can be, especially if times are tough. But there are two good arguments for it that make economic as well as moral sense:

1. A rising tide lifts all boats. This is the opposite of "trickle down" economics, in which we trust the rich to spread their wealth around. Essentially, if people are making more money, they'll spend more money. Where will they spend it? Probably in places that hire people for minimum wage, like big box stores and restaurants. Unlike trickle-down economics, this theory has the advantage of actually working.

2. Employee retention. Connecticut is bleeding population, as recent reports have shown. We may lose another congressman in 2010 if this trend continues. Shouldn't we make our state more attractive for young people, so that they stay here instead of migrating out west or down south?

Not that this matters to Rep. D'Amelio. I wouldn't want to be one of his busboys right now.

Source
Keating, Christopher. "Rell Backs Minimum Wage Hike." Hartford Courant 3 May 2005.