Connecticut’s minimum wage was increased on July 1 to $14 an hour as a result of legislation signed into law during pre-pandemic 2019. In 11 months, the state minimum wage will again be increased up to $15.
Even before the next increase, Connecticut’s minimum wage is among the highest in the country, exceeded only by California and Washington, D.C., as well as a handful of cities that have set their own minimum wages.
“For too long, while the nation’s economy grew, the income of the lowest-earning workers has stayed flat, making already existing pay disparities even worse and preventing hardworking families from obtaining financial security,” Gov. Ned Lamont said in a press statement announcing the increase. “This is a fair, gradual increase for workers who will invest the money right back into our economy and continue supporting local businesses in their communities.”
In the midst of rising inflation, high fuel prices, increasingly expensive consumer goods and ongoing logistical and labor issues, the wage increase manages to be both ill-timed in the eyes of employers and insufficient in the view of employees.
“We obviously anticipated it since the law was passed,” said Gary Lavin, president of Duchess Restaurants, a Connecticut-based chain. “The increases came in steps. But the toughest thing right now is that we could plan for that, but paper and food costs have gone crazy. You just can’t predict that, it seems to go up every week, every month and no end in sight. It’s challenging times. Between war and disease and an impact on supply chains, the only option you have on our side is to raise price points.”
Lavin said that while increased labor costs will certainly have an impact on his bottom line, they cause less frustration than issues with paper printing and the base cost of food. He also allowed that it might be possible that the higher minimum wage could attract some people back into the workforce, but in the meantime his employees already making at or above the minimum will likely want raises.
Nonetheless, Lavin said for him this is simply part of running a business.
“I don’t get emotional about it,” he stated. “You just have to manage the cost of labor and your other costs. I’ve been doing this, and Duchess is a family business. My father was involved since the 50s, and I’ve been involved for 30 years, so we’ve seen just about everything.”
Many service industry workers are already earning at or above the minimum wage. One employee at a restaurant based in a Connecticut service plaza who was already earning $14 an hour spoke under condition of anonymity about living with that amount.
The employee has a daughter and is trying to put herself through secondary school. She said that she’s only able to make ends meet because she lives with her grandmother who contributes part of the rent and will provide childcare at a low rate. Without her grandmother’s help, she believed that she would not be able to afford the $1,800 rent on their current home.
“I’d be in trouble,” she said, tallying up expenses that already add up to over half her paycheck. She has stopped buying herself clothes as much as possible, acquires hand-me-downs to dress her daughter and still frequently finds herself having to carry credit card debt to get through the month.
“I don’t borrow from friends,” she said. “When I’m buying something big, I just try to pay half of it in cash and put the other half on the credit card.”
According to the employee, the challenges are only mounting as costs for many necessities are rising. She doesn’t have a car and relies mainly on the bus, but on occasion needs to resort to a taxi or rideshare app, particularly if her daughter has a doctor’s appointment. High fuel costs impacting trip prices mean that making it to a shift on time can force the choice between paying for childcare or an Uber ride, which will put a large dent in the day’s earnings.
Baby goods, particularly baby formula, are particularly expensive and can be difficult to hunt for.
“Formula is really expensive now. If you get a small box it’s already $21 for just one small one, and it’s only going to last like a week and a half,” the employee said. “A box of wipes is like $40 a box, the diapers are almost $50.”
Trips to Costco can save money, she noted, but they require borrowing a car and many stores limit the amount of formula customers can buy at once.
“It is not going to make that big of a difference at all,” she said. “I feel like when I was getting paid $12 an hour, I was actually getting a little bit more money on my check than usual because I used to work overtime, but they stopped since we went to $14.”
Asked whether $14 was enough to live on, the employee was unequivocal.
“It’s not,” she said glumly.
Solution to inflation? Pay workers less of course! Don’t think about taxing windfall profits