Wage Study Group Starts with Conclusion in Hand

If a study group starts its work with faulty premises, then is it really a valid study?
Even before the legislature created the Connecticut Low Wage Advisory Board, Connecticut’s business community was concerned that the group might have an overtly political mission.
Now it seems clear—after only the group’s second meeting—that the board’s likely purpose is to give “official” legitimacy to progressive attacks on Connecticut’s business community.
For example, the board is charged with studying and making recommendations on:

• “Causes and effects of businesses paying low wages to residents of the state”

This is a faulty premise, particularly given that Connecticut pays some of the highest minimum wages in the U.S., and after taxes, in the world

• “Reliance of businesses on state-funded public assistance programs”

Another flawed premise based on advocates’ belief that all employees of restaurants and retailers are receiving expensive state services

• “Minimum wage pay rates necessary to ensure working residents of the state may achieve an economically stable standard of living”

An ambiguous quest which seems to assume current wage rates are inadequate.
Beyond making its own legislative proposals, the committee also intends to review and comment on any other legislative and agency proposals touching on any of these issues.
Count the costs
The second meeting included a presentation by David Cooper, senior analyst at the Economic Policy Institute, on “Balancing paychecks and public assistance: How higher wages would strengthen what government can do.”
Cooper asserts that productivity has increased in the U.S. while wages have not kept pace, and for each additional dollar in minimum wages paid to employees, there would be a larger corresponding decrease in spending on government programs.
Business advocates on the board quickly questioned several aspects of the study.
For example, the study claims that workers in certain industries, like food service, have a higher percentage of workers on government programs–but doesn’t take into account that the majority of those workers are part-timers.

• technological innovations that have enabled productivity in certain sectors to skyrocket since the 1970s
• the likely impact each additional dollar in wages would have in promoting the use of automation, further reducing workers’ hours
• the likely result of higher wages being higher prices for goods and services
• any savings from social programs likely would be rerouted to spending on other government programs
• the likely social impact of fewer job opportunities for entry level workers, particularly teens

Even with a few business community voices on the board, there continues to be a high level of concern about the anti-business sentiment of the Low Wage Advisory Board.
For more information, contact CBIA’s Eric Gjede at 860.244.1931 | eric.gjede@cbia.com | @egjede