The minimum wage in Connecticut went up this year. It’s now $15.69 per hour.
That’s thanks to the state’s first-ever economic indicator adjustment which is linked to the federal employment cost index. This was part of the minimum wage legislation Gov. Ned Lamont signed in 2019.
"It automatically adjusts with the rate of inflation. So now we’ll have higher purchasing power. We won’t make less money in the future because of inflation because it will go up with inflation."
That’s Joe Hawthorne, the President of the Connecticut AFL-CIO. He says this index is not only good for workers but also for businesses.
"Hear me out. It gives predictability for businesses that there won’t be a spike to catch up when it’s politically feasible that they can plan for it. Cause they’ll know each year what the rate is going to be as it goes up."
Chris DiPentima has a different perspective. He’s the President and CEO of the Connecticut Business and Industry Association. He says the adjustments for inflation to the minimum wage could eventually drive businesses out of the state.
"Now we’re going to be tied to an index that will most likely go up and up and up every January 1st. And at what point in time does that increase cross the line of where the market is or where the market is willing to be on the minimum wage? When you eventually cross the line because we’re either in a softer market, or there are more available employees to hire, that’s when you see a state like Connecticut become less competitive. We’re in a time when the minimum wage from the government has been less of a driver, less of an issue and it’s really what the market’s driving and the market’s driving higher minimum wage levels than the government set and that’s why it’s important to really let the market control that."
But will the increase to the minimum wage create a living wage for workers in Connecticut? Lisa Tepper Bates is the President of the United Way in Connecticut, which issues the annual A.L.I.C.E, A-L-I-C-E report. It stands for Asset Limited, Income Constrained, Employed. A.L.I.C.E. measures the number of individuals and families who work, but don’t make enough to meet their basic needs. Bates says the increases to the minimum wage still fall short of a living wage.
"In the most recent report which is based on 2021 data, what we found is unfortunately the number of ALICE households has grown and it’s now 39% of the state. That’s 54,000 more than in 2019. And this is based on what we call a survival budget so what a family or a single person needs to make just to pay the cost o f necessities. What we found is that for a single person, they needed to make $16.56 an hour at least in 2021 just to make ends meet. For a family of two parents and two small children, they needed to make $26.66 each, an hour in order just to make ends meet and before taxes. And for context in 2021, 60% of the top 20 most common jobs in Connecticut paid less than $20 an hour."
You can hear more about the new minimum wage and how it affects workers, businesses, and the personal economies of working families in Connecticut on The Full StoryPodcast. You’ll find it on our website at WSHU-DOT-ORG.
