On the same day it was announced that Connecticut lost 1,800 more jobs in December--and that more people have quit searching for a job altogether-- the legislature’s Labor Committee voted to raise a bill that would increase the state’s minimum wage and weaken employers’ ability to create jobs.  

Studies have shown that increasing the minimum wage, despite what its supporters say, often does more harm than good to the state’s poorest citizens.  Here’s why:   

  • According to 85% percent of studies conducted over the last 20 years on the effects of an increase in the minimum wage, raising the wage actually leads to job losses for young, low-skill employees. (Research conducted by the University of California-Irvine and the Federal Reserve Board.)
  • Each minimum wage hike makes it harder for employers, especially small businesses, to hire young, low-skill workers--effectively denying critical employment opportunities that would have given them the skills for future advancement. 
  • Raising the minimum wage does little to reduce poverty, since the majority of working-age individuals living in poverty are not in the workforce earning wages.   
  • If the minimum wage is increased, many small businesseswould face the unpleasant choice of scaling back on jobs or increasing the prices of their goods and services,leading to more widespread economic hardship, not benefit.     

The road to prolonged high unemployment is paved with good intentions.  While the Labor Committee’s desire to put more money in the pocket of the state’s poorest residents is well-intended, their approach will have the opposite effect.

The best way to help individuals in entry-level and low-skill jobs is to stop adding costs to employers and instead encourage more hiring and more opportunity for employee advancement.

For more information, contact CBIA’s Eric Gjede at 860.244.1931 or eric.gjede@cbia.com.