New Haven Register (Sunday) (New Haven, CT)
BEYOND $15?
State’s minimum wage law has lever for inflation relief
With Connecticut’s lowestpaid workers in line for raises in six weeks, the state’s minimum wage could end up climbing beyond the $15 threshold lawmakers set for next year — courtesy of a little-noticed provision in an enabling 2019 law that links minimum hourly pay to a federal index that tracks payroll costs for employers.
In 2019, Gov. Ned Lamont signed into law a Connecticut General Assembly bill to increase the minimum hourly wage to $15 by 2023.
An early version of that legislation included a mechanism to peg the minimum wage to the Consumer Price Index that measures inflation. Lawmakers ended up scrapping that in favor of linking the minimum wage instead to the Employment Cost Index updated monthly by the U.S. Department of Labor.
Speaking this week in Hartford on budget adjustments for the upcoming fiscal year, Lamont referenced the pressures many workers continue to face as a result of the COVID-19 pandemic and a spike in household costs like rent, vehicles and gas.
“For me, the No. 1 priority was getting people back to work, doing everything I can to keep this economy growing,” Lamont said Monday in Hartford. “Make sure it’s an economy that leaves nobody behind and it means real opportunity for everybody.”
In Connecticut, employers must pay at least $13 an hour with a few exceptions, including workers who make tips.
Despite struggles to fill open slots, some employers continue to offer starting pay below $15 for jobs requiring minimal qualifications.
Connecticut’s minimum wage rises a dollar starting in July, with one more hike scheduled for July 2023 to reach the $15 threshold that activists have been lobbying to make the national standard. Annualized, that will allow the lowest paid workers to earn an extra $4,000 on top of the $27,000 the $13
minimum wage equates to for full-time jobs.
Through its historic progression of increases, the Connecticut General Assembly has kept the state’s minimum wage roughly in line with inflation over the years. The $6.70 minimum wage employers were paying in December 2002 would be worth $14.50 at today’s currency values, according to a SmartAsset inflation
calculator.
New England has seen the sharpest increase this year of any region nationally on DOL’s Employment Cost Index, up 2 percent in the past three months to edge the increases seen in California and other states in the West.
Between January and March, the CPI was up 2.1 percent in New England, a slower rise than in many other parts of the country.
In California, skyrocketing inflation has already triggered an escalator in the state’s minimum wage that is linked to the CPI, according to the State Department of Finance. California workers making the state $15 minimum will get an extra 50 cents an hour, amounting to a modest $20 bump in weekly pay for those working full time.
Some employers that rely on lower-wage workers have been able to keep costs in check by reducing staffing, however, according to Tom O’Hern, the CEO of Macerich, which owns the Danbury Fair mall among dozens of shopping centers nationally, “What we have heard from a number of retailers is they ended up with slightly less staffing than they were pre-COVID — and even though the hourly rate may be up, the overall labor cost is flat to down.”
O’Hern was speaking Monday on a conference call. “We’re actually hearing more about improving margins than shrinking margins,” he said.