What a difference a campaign season makes. It was not so long ago – in March 2012 – that Governor Dannel Malloy was valiantly trying to tamp down efforts among General Assembly progressives to raise the minimum wage in Connecticut to $9.25 an hour from $8.25.
A story issued from Rick Green of the Hartford Courant: “Quassy Stands To Lose If Minimum Wage Rises: Even 50-Cent Hike Could Cost Over $150K, Owner Says.”
Mr. Green interviewed a minimum wage employer, George
Frantzis of Quassy Amusement Park on Lake Quassapaug in Middlebury, Connecticut, who pointed out
that the prospective boost in the minimum wage would force him to take
measures. Mr. Frantiz told Mr. Green that a minimum wage increase would force
Quassy to “cut back on recently approved plans to expand a water park. There
would be fewer raises for returning employees,” not to mention business lost
from the absence of a water park.
Low wage employers operate on a profit margin considerably less
than, say, Cigna Insurance Company, which was festooned by Mr. Malloy with $47 million in tax benefits to improve the profit line of the multi-billion dollar company and re-anchor Cigna
in Connecticut should the company be considering a move to, say, South
Carolina, now home base for PTR, a Connecticut gun manufacturer that moved out
of state to escape an atmosphere made frosty by Mr. Malloy’s politically self-serving
comments.
In throwing a rhetorical brick at the National Rifle
Association (NRA), Mr. Malloy and U.S. Senators Dick Blumenthal and Chris
Murphy clipped the jaws of not a few gun manufacturers in Connecticut, still
called “the provision state,” a moniker the state richly earned in the American
Revolution, when it supplied the ragtag army of George Washington with war
munitions. Referencing the slaughter at Sandy Hook, Mr. Malloy said that the much
belabored NRA – and by extension gun manufacturers in his own state -- cared only about the Benjamins (see prior
blogs and columns concerning smoke shops and the Donovan scandal). Connecticut
gun manufacturers and their employees took the message and began looking for
the exit signs.
In the Green interview, then Malloy Top Aide, Chief Cook And
Bottle Washer Roy Occhiogrosso smartly summed up Mr. Malloy’s position on the
minimum wage: “’There are only so many times you can say Connecticut is open
for business,’ said Malloy strategist Roy Occhiogrosso, whose boss is faced
with the challenge of convincing companies to move here. The governor ‘is not
sure that raising the minimum wage is the right way to go. He is definitely
concerned that increasing the minimum wage would send the wrong message.’”
Evidently, the WRONG message sent to both in-state and
out-of-state businesses foolish enough to consider moving into Connecticut’s high
tax and regulatory briar patch would be: We sure hope there’s a surfeit of tax
revenue in your udders.
Mr. Malloy’s opposition to an increased minimum wage was not
long-lived. That was then, as the fat lady preparing to step on stage to sing
her doleful song might say – and this is now. Elections loom on the horizon;
there are interests that must be satisfied, ideological bows to take.
A little common sense sprinkled on the minimum wage gambit
yields this:
The real minimum wage is a salary set following a hiring
arrangement satisfactory to the two principals involved in the salary negotiation
– the employer, who sets a price of labor, and the employee, who does or does
not accept a salary offer. The so called “minimum wage” that Mr. Malloy and the
Democrat dominated Generally Assembly is pressing upon all businesses in
Connecticut is a state mandated wage increase that affects only a few workers
in Connecticut. In 2012, the median income for a family of two in Connecticut was
$69,341.64. In order to provide this income, assuming both members of the
family are working, both partners would have to be earning a “living wage” of $667
per week, which amounts to an hourly rate of $17. Assuming progressives are successful in
boosting the minimum wage to $10.10 by 2017, the person receiving the new
minimum wage would fall short of a living wage by $7 per hour. That’s the bad news. The worse news is that
there will be fewer employees receiving the mandated minimum wage. And the even worse news is that the jobs
eliminated by employers paying the inflated labor costs will fall most heavily
upon the working poor.
Cigna, the Connecticut company Mr. Malloy favored with tax
dollars, one may be sure, pays its employees a salary above minimum wage. The
Cigna salaries also are set as supply and demand arrangements between private
parties. If you are a prospective employee and dislike the salary offer at
Cigna, you can always try your luck at Aetna or some other insurance giant in
what used to be called “the insurance capital of the world” – for the time
being. In a universal health care system, large insurance companies will
transform themselves into boutique operations servicing the sort of people
whose income matches that of Senator Dick Blumenthal, the 6th
richest U.S. Congressman, or U.S. Representatives Rosa DeLauro and Jim Himes,
both millionaires who will be able to afford boutique health care, unlike
minimum wage workers.
Asked by a Harford Courant reporter to account for his
transformation from a tepid supporter of the minimum wage to a drum banging
cheerleader, Mr. Malloy said, “The economy's getting better ... the American
people are overwhelmingly supportive of it, other states are moving solidly in
this direction and that's why I proposed a plan that phases it in. It doesn't
do it overnight, but let me be very clear: I support a $10.10 minimum wage
tomorrow and believe that the Congress of the United States should enact it ...
but in the event that they're not going to do it, I think Connecticut should
take reasonable steps to lead this discussion."
Mr. Malloy’s critics put the gaudy show down to election
year politics. One Republican groused that when the minimum wage was raised by
Congress 10.6 percent in 1990, nearly 600,000 teen jobs disappeared in the six
months following the artificial boost in labor costs. But his voice will not
shake the rafters, and all the politicians who favor the elimination of teen
jobs in return for votes from a citizenry fooled most of the time by most of
them will be in office when Johnny doesn’t land that missing summer job at Quassy
Amusement Park.
Comments
So, how about if the minimum wage hike is tied to an improvement in the Connecticut business climate. A 12% hike in the minimum wage could be matched with a 12% cut in business tax and/or a 12$ cut in State spending.
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Tom Foley, the 2010 Republican gubernatorial nominee who has been courting the Democratic base in his quest for a rematch this year, said the goal of a $10.10 minimum was reasonable.
“It certainly doesn’t seem to me that’s out of the range of what's required to support a family in Connecticut, the minimum required," Foley said.
Foley said he favors a multi-tiered minimum, allowing a lower wage for entry-level workers or during a training period under some circumstances.
http://ctmirror.org/malloy-wants-a-10-10-minimum-wage-by-2017/