Tuesday, January 31, 2012

Donovan Wants Minimum Wage Boosted

Speaker of the state House of Representatives Chris Donovan, now running for the U.S. Congress as a Democratic candidate in Connecticut’s 5th District, will be leading a group of Democrats who want to make changes to the state’s minimum wage laws, according to a notice from WTNH news channel 8.

“They have scheduled a news conference on Tuesday at the Legislative Office Building to discuss their proposals, including increasing the current hourly rate of $8.25 an hour.

“Another possible change under consideration is imposing automatic increases in the state's minimum wage, based on the cost of living index. Several states already have such a requirement on the books.

“House Speaker Christopher Donovan, a candidate for the 5th congressional district seat, is expected to be joined by several lawmakers, a union official, a business owner and a minimum wage worker.

“The issue will likely be taken up in the new session of the General Assembly, which opens on Feb. 8.”

Most economists believe that artificial boosts in the minimum wage create significant distortions in the labor market.

A minimum wage above that set by free markets limits employment opportunities for workers in training, college students, interns and part time workers. Some low paying jobs provide entrée points for workers without marketable skills, placing their feet on the lower rungs of a labor ladder that will carry them upwards to success and higher wages.

Forcing companies to pay politically inflated labor costs increases the likelihood that companies will outsource jobs to foreign parts where the cost of labor is less; or worse, it may drive small companies out of business. Mega-companies rarely have difficulty in meeting minimum wage demands.

Artificially increased labor costs particularly impact nonprofit and charitable organizations.

Increases in the minimum wage incentivize companies to replace mechanized job functions with robotic replacements, depriving low and mid-wage workers of employment opportunities.

Some economists opposed to the minimum wage argue that its elimination would provide more jobs for U.S. workers, boost tax revenues and reduce incentives that lead to illegal immigration.

The minimum wage generally creates competitive advantages for foreign companies, where the cost of labor is less. This imbalance creates obstacles for American companies competing globally.

When the minimum wage is set by politicians, personal choice is curtailed, since American citizens are deprived of the ability to say yes or no to job offers.

It is extremely doubtful, so long as Mr. Donovan as Speaker continues to direct the business of the House, that any of the above points will be urged against yet another artificial hike in Connecticut’s minimum wage.
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