The headline of this story was the question posed to a group of panelists Monday at the “CT at Work” conference sponsored by the Connecticut Humanities Council at Wesleyan University.
Increasing the minimum wage to giving tax credits to companies in order to get them to stay in Connecticut were just a few of the controversial topics discussed by U.S. Rep. Joe Courtney, former U.S. Rep. Rob Simmons, Deputy Economic Development Director Kip Bergstrom, and Dan Haar, a business columnist at the Hartford Courant. The conversation was moderated by John Dankosky, host of WNPR’s “Where We Live.” (Listen to the panel discussion here).
One of the recent policies the group discussed was the decision by the state to give nearly $115 million to Bridgewater Associates, one of the largest hedge funds in the world, to move its headquarters from Westport to Stamford.
Deals like this are only offered by the state if there’s evidence the company is looking to move out of the state, Haar said. If the hedge fund left, they would take with them something like 1,200 workers who easily average six figures a year in income, he said.
“That’s an enormous risk to lose at a bargain rate of only $115 million, considering this company spins off maybe three times that per year in taxes for the state of Connecticut,” Haar said. And while there is no information about exactly how much the employees and the company contribute to the state in taxes, Haar estimated it was far greater than $115 million.
Simmons disagreed with Haar’s assessment. He called is a “lousy” deal for Connecticut’s taxpayers.
“It’s a bribe. It’s crony capitalism,” Simmons said, adding that there are dozens of other hedge funds in Fairfield County and he doesn’t understand how the state goes about picking one over the other.
Bergstrom, who served as economic development director under Gov. Dannel P. Malloy when he was mayor of Stamford, said the state in the last two years has created 12,000 jobs and retained more than 30,000 jobs through a variety of incentive programs like the “First Five” program used to retain Bridgewater Associates.
Another one of those economic development programs is the Small Business Express program, which gives grants and low-interest loans to small businesses with 100 or fewer employees. The companies don’t have to promise to create jobs, but many have, according to the Economic Development department.
Haar said if those small companies are not exporting goods and services from Connecticut, then the state is simply moving money around.
“It’s not that it’s a bad investment. It’s that it’s not an economic investment,” Haar said.
Bergstrom, who was filling in for Malloy, agreed with Haar.
“I would generally agree with that,” Bergstrom said. “It’s the economic base theory of economic development. You invest in the economic base and not in the local businesses that feed off of it.”
However, this is a unique time in the economy and folks who in the past would be given loans by banks weren’t able to get their hands on working capital, Bergstrom added.
“I look at it as a counter-cyclical program that keeps Main Street open, so that it’s still there when the economy recovers,” Bergstrom said.
There also was the issue of the minimum wage. Last week, fast food workers across the country protested the amount of money they’re paid for doing their job. They said it should be closer to $15 to $19 an hour.
Haar said that if the minimum wage was indexed, then it would be around $10 an hour. At the federal level it’s $7.50 and in Connecticut it’s currently $8.25, but after legislative action this year the minimum wage is scheduled to increase over the next two years to $9 an hour.
“Obviously, the economy can not sustain $15 an hour in fast food,” Haar said.
He said it’s not a matter of simply adding 50 cents to the cost of a sandwich to increase wages. The problem is much larger. “Work has been so devalued verses capital and ideas that people can’t get by working full-time and that’s not okay,” Haar said.
Courtney said President Barack Obama, who proposed a $9 an hour minimum wage, is now supporting a $10 minimum wage. He said there’s a bill in the House that would take it up to $10.10 over a three year period, and then index it going forward.
“If you’re working 40 hours a week at a wage level that still says you have to get food stamps to put food on the table and you are still below the poverty line, there’s something amiss,” Courtney said.
He said that even though economists continue to argue about the benefits of the minimum wage, he believes the public will force lawmakers to take action to increase it. Maybe not this year, but in the next few years, Courtney said.
So what does all of this have to do with humanities?
Stuart Parnes, executive director of the Connecticut Humanities Council, said the day-long conference is just the first of many events the group is planning over the next year with the theme “CT at Work.”
He said work is a humanities theme, but it’s also an important theme in Connecticut right now.
“Part of our agenda was to help people recognize that the humanities are relevant. That it’s not an irrelevant, intellectual exercise, but that this is real in our lives,” Parnes said. “The whole work crisis is a huge deal in Connecticut right now, so we wanted to focus on it.”
As part of the initiative, the group brought “The Way We Work”, a Smithsonian exhibition, to the state. The exhibition draws upon the National Archives’ rich photographic collections documenting 130 years of changing work life in America. It opens this week at the New Haven Free Public Library and heads to Torrington’s Warner Theater on January 25.
For more information about the “CT at Work” initiative and events related to it, visit: cthumanities.org/ctatwork.