A national research group released a report Tuesday that concluded the living wage for a single adult in Connecticut is $19.08 an hour.
That number increases to $40.48 per hour for a Connecticut adult with two children.
The “Families Out of Balance” report is the first in the 2014 Job Gap Economic Prosperity Series produced by the Alliance for a Just Society. The Connecticut Citizens Action Group helped contribute Connecticut-specific information to the report.
The overall report found that low-income households bear a dramatically disproportionate debt burden. The low-income group has $15.64 in income for every $1 of debt, while more affluent workers have $32.42 for every $1 of debt.
In Connecticut, students graduate with $27,816 in student loans and the average credit card holder in the state has an outstanding debt of $5,617. But those debt figures were not included in the calculation the group used to come up with the living wage, which varies from state to state.
The overall report found that making ends meet can be difficult for any low-wage worker, “but for households saddled with debt, supporting a family on low wages can be next to impossible.”
The living wage varied from $14.40 per hour in Montana to $19.08 in Connecticut, and $22.49 per hour in New York City.
This year, Connecticut was the first state in the nation to adopt a $10.10 an hour minimum wage by 2017, but the report found that “it is still not nearly enough to support a single person, let alone a family.”
A living wage, according to the report, is the hourly pay needed to cover the cost of housing, food, utilities, and other expenses, including modest savings.
“Gov. [Dannel] Malloy and the legislature should be applauded for enacting paid sick leave legislation and increasing Connecticut’s minimum wage to help working families and opponents of these policies should be ashamed of themselves,” Tom Swan, executive director of CCAG, said. “However, these laws are not nearly enough and we will continue to advocate for them to complete their unfinished business, including to demand that large profitable corporations like Walmart stop having taxpayers subsidize their low wages, to continue to fight to make the minimum wage a liveable wage, and to reinvest in higher education in a way that does not leave families struggling with such high levels of debt.”
Swan headed a coalition of labor advocates earlier this year in supporting legislation that would fine employers with more than 500 workers $1 per hour for any workers who are not being paid a standard wage, plus health care benefits or a 30 percent pay differential.
Under the bill, businesses would have the option of either raising wages or paying the fees to help offset what their employees cost the state in subsidies, Swan said.
But a drafting mistake may have contributed to the defeat of the legislation.
By citing the “standard wage”, business associations said labor advocates proposed legislation that would impact far more than what is traditionally considered “low wage” employers.
That’s because standard wage rates exist for every hourly occupation in the state — even those you might consider good paying jobs.
Labor advocates said it was their intention to have it apply only to businesses paying their workers less than the lowest standard wage rate in the state, which works out to about $11.31 an hour.
The legislation, according to the fiscal note, would have impacted about 100,675 of the 771,492 employees who work for firms with at least 500 employees.
Business groups warned lawmakers about the message that type of legislation sends to the business community.
Andrew Markowski, state director of the National Federation of Independent Businesses, said his organization has concerns the bill would set a terrible precedent “by imposing a tax on certain employers that the state deems to be underpaying certain employees.”
Tim Phelan, president of the Connecticut Retail Merchants Association, called it “arbitrary and unfair,” especially when retail sales provide one in every five jobs in the state.
The bill passed the Labor Committee, but was defeated 16-27 by the Finance, Revenue, and Bonding Committee.
The only other state to attempt to pass similar legislation was Maryland and that law was struck down by a federal court judge in 2006.
Markowski said studies like the one above often come from groups that “lack a fundamental understanding of the economy.”
He said the best way to raise wages is to have a vibrant economy and the best way to do that is by lowering the cost of doing business.