In Support of a $15 Minimum Wage in Connecticut

Thank you, members of the Labor and Public Employees Committee for the opportunity to testify today.  My name is Leo Gertner. I am a staff attorney for the National Employment Law Project (NELP) in our D.C. office.  NELP is a non-profit, non-partisan research and advocacy organization specializing in employment policy.  We are based in New York with offices across the country. Our staff are recognized as policy experts on a wide range of workforce issues, including the minimum wage.  We have worked with dozens of city councils, state legislatures and the U.S. Congress on measures to boost pay for low-wage workers and improve labor standards. We track both, the economic experience of state and local jurisdictions that have increased their wage floor, and the academic research on the minimum wage.  As a result, we have developed strong expertise on the analysis of minimum wage policy.

NELP testifies today in support of SB 2 and HB5004, which would raise Connecticut’s minimum wage to $15 by 2022. This policy would benefit an estimated 332,000 workers in the state. If Connecticut approves a $15 minimum wage, the state would join a growing number of jurisdictions across the country that have enacted or are pushing for similar policies. Five states—New York, New Jersey, Massachusetts, Illinois and California—have already adopted statewide $15 minimum wage policies, and additional states—including New Hampshire, Vermont, Maryland and Hawaii—are currently considering similar legislation. In addition, more than two-dozen cities and counties from Washington, D.C. to Minneapolis to Flagstaff, Arizona have approved $15 minimum wage legislation of their own, or have campaigns underway.

The most rigorous modern research on the impact of higher minimum wages—including robust increases to $13 or more—shows that these policies boost worker earnings with little to no adverse impact on employment, and that the implementation of higher local wages has proven manageable for employers. The few analyses showing adverse effects—such as the University of Washington’s study of Seattle’s minimum wage increase—were shown to have serious flaws that compromised their findings. As a result, the authors of that study were forced to reverse their position on the minimum wage.

A robust minimum wage benefits not only low-wage workers, but also businesses and the economy as a whole. Higher minimum wages have raised pay for workers in the face of larger economic trends that have led to stagnant and falling wages across the bottom of our economy. They also have been shown to reduce economic hardship, lifting workers out of poverty, and improving other life outcomes. The increased consumer spending triggered by higher wages can have the effect of boosting demand for goods and services and keeping money circulating in the economy, creating a virtuous cycle that benefits workers, businesses and the economy. These positive benefits have led a growing number of business owners and economists to endorse a $15 minimum wage.

In what follows, I will expand many on these and other key points, and will summarize the economic evidence on the impact of the minimum wage.

The Need for a $15 Minimum Wage in Connecticut

Workers throughout Connecticut need to earn more than $15 per hour today, just to afford the basics; by 2022, they will need even more.

According to analysis by the Economic Policy Institute (EPI), an estimated 332,000 workers in Connecticut (nearly a fifth of the state’s workforce) would benefit from the adoption of a $15 by 2022 minimum wage.[i] Another 132,000 residents would be indirectly affected by a spillover effect. The average worker who works year-round would receive an extra $3,000 in annual earnings.[ii]

Throughout Connecticut, workers need to earn more than $15 per hour today just to afford the basics. By 2022, they will need even more.  Analysis of EPI’s Family Budget Calculator shows that even single workers without children in Hartford County need nearly $18 per hour today to make ends meet. In Fairfield County, that number is already a staggering $22 per hour today. By 2024, these workers will need to earn an hourly wage of $20 or more. In all Connecticut counties, single and married workers caring for at least one child need to earn significantly more.

Housing expenses, alone, can quickly drain the budgets of low-income families. The benchmark for affordable housing is 30 percent of income.[iii] Yet, in Connecticut, over 50 percent of all renters spend more than a third of their total household budgets on housing costs.[iv]

Today, in Connecticut, rent for a modest one-bedroom apartment averages $1,040 per month,[v] or 60 percent of pre-tax earnings from full-time work at the current state minimum wage. In Windham County, a one-bedroom apartment averages $903,[vi] or 50 percent of gross minimum wage full-time earnings. Rent for apartments with two or more bedrooms, which parents raising children would need, cost more and account for even larger percentages of gross monthly earnings. In the Bridgeport area, a two-bedroom averages $1,272, an astounding 72 percent of pre-tax earnings for a full-time minimum wage worker. (See Appendix 1 for additional estimates by county or region, and apartment size).

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