Main Streets in Connecticut would suffer from a $15 minimum wage

The state House and Senate are moving bills that would send the minimum wage soaring to $15 an hour and Gov. Ned Lamont supports a similar measure. If the wage threshold does rise in a short timeframe by almost 50 percent, it will be devastating to many small Connecticut businesses, especially restaurants, retailers and seasonal businesses.

One example is a small breakfast restaurant, which for 20 years has served up bacon, eggs and home fries in the morning, and sandwiches at lunch. It’s in a Connecticut town that attracts tourists seasonally from May through November. The owner says if the minimum wage goes to $15, she and all her employees will be out of a job.

Right now, that restaurant’s cooks and dishwashers make more than a couple of dollars above the state’s $10.10 minimum wage. One experienced full-time person makes $18. The owner says with a $15 minimum wage she would have no choice but to raise all her employees’ pay to retain them. But where does she find the money?

The business owner explains it would be impossible to get customers to pay a higher price than she now charges for meals. She can’t cut other costs because rent, supplies, food, insurance, and utilities will only go up. Her profits are minimal, still lower than before the recession.

These concerns about the effect of a $15 minimum wage are echoed by many entrepreneurs. A Connecticut pet center owner says such a hike might be the final straw that drives her to move her business to a cheaper state. She offers boarding, grooming, doggie daycare, pet sitting, and dog training.

There are five or six employees who handle dog walking, phone calls, check-ins and more during the season when people take vacations and need boarding services. There are fewer in the winter months. Workers make between the state’s current minimum, $10.10, and $12.50. The owner admits she makes a bit less than her highest paid employee, even when she is working six days a week — but hopes business will grow.

The result, she says, is that there would be no more hires of young, inexperienced workers at a $15 minimum wage because they aren’t worth it. She would cut jobs during the busy season and reduce hours to cope.

What especially irks her is that Connecticut piles on so many added expenses that hinder small business success. There have been continually rising license fees and an expanded sales tax on services that made fewer customers able to afford her rates. The business owner says those costs and mandates make survival difficult and are driving her away.

Many people who think a $15 minimum wage sounds like good policy don’t realize it will hurt the very workers proponents claim it’s supposed to help. They will lose hours and jobs and end up with a lower paycheck. A recent national economic forecast by our small business organization, NFIB, found a $15 minimum wage would cause job losses, less income, and hurt economic output across the country. It would fall the hardest on small businesses.

As these two small business owners explain, people don’t often understand all the juggling it takes to keep a business running, and how a $15 minimum wage would be a crushing blow. Businesses like this dot every Main Street. Their owners are often pillars of the community. They hire your neighbors and friends.

If lawmakers bring all that to a screeching halt, the economic impact across Connecticut would be devastating.

Andrew Markowski is state director of NFIB, an association that advocates for thousands of its small business members in Connecticut.

 

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