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Now not time for mandatory wage hike

Published March 19. 2012 4:00AM

This newspaper has editorialized in favor of increases in Connecticut's minimum wage in the past and we fully expect to do so in the future, but now is not the time for such an increase as the state tries to keep job growth and a fragile economic recovery going.

Without a change Connecticut will still have one of the highest hourly minimum wages in the country, at $8.25, or $1 above the federal standard. Connecticut's rate already exceeds that of neighboring states that it often competes with to attract business. New York's minimum wage is $7.25, Rhode Island $7.40 and Massachusetts $8.

Is Connecticut's minimum wage a "living wage?" Unfortunately not, but by approving an increase at this time, the legislature would put job growth at risk. Faced with a higher minimum wage, many businesses will make the calculation that they cannot afford to provide as many jobs. And those decisions will hit new entries into the job market the hardest, particularly teenagers, who face historically high unemployment rates, denying many the chance to develop a work ethic at a formative age.

Connecticut can hardly be faulted as cold hearted when it comes to labor issues and the working poor. Last year the legislature approved an earned income tax credit targeted to help that very group.

Also last year Connecticut became the first state to pass mandatory sick leave legislation. Businesses deserve the chance to adjust to that requirement before having to also find the revenues to support a higher minimum wage.

House Speaker Christopher G. Donovan, a candidate for the Democratic nomination for Congress in the Fifth District, is confident he can get a minimum wage increase through the House. But apparently recognizing he faces opposition in the Senate, Speaker Donovan agreed to back off from his proposal to increase the minimum wage from $8.25 to $9 on July 1 and to $9.75 a year later, surpassing any other minimum wage in the country.

The new proposal, approved last week by the Labor and Public Employees Committee, would raise the minimum wage instead by 50 cents in each of the next two years. While better, we still feel the timing is wrong.

Also of concern is a proposal to automatically tie future minimum-wage increases to the consumer price index. Under some circumstances that could put Connecticut businesses in a terrible bind. If the economy slipped at the same time consumer prices went up, businesses would be forced to pay higher wages when they could least afford it, accelerating job layoffs. Called stagflation, it has happened before.

Gov. Dannel P. Malloy could end the drama by announcing his position on a minimum wage increase. If he makes it clear he will veto an increase this year, then the bill is dead. We suspect the governor also recognizes the time is not good to do this or he would have provided his backing for the legislation already. For a governor who so far has not been afraid to make it known where he stands on issues, his evasiveness on this issue is striking.

"I've not reached any conclusion," Gov. Malloy told reporters.

Perhaps the governor is hoping the Senate will do the dirty work, kill the proposal and save him from making a decision that is either unpopular with labor or unpopular with business.

When an economic recovery has clearly taken hold will be the time to discuss mandatory wage increases, but not now.

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