A Hartford daycare was the backdrop Thursday for a press conference on a union-backed bill that would fine large employers who pay their employees less than $15 an hour.
It’s a bill that would catapult Connecticut back onto the national stage for being the first state in the nation to institute such a fine on companies with more than 500 employees. Connecticut made the national spotlight in 2011 when it approved paid sick day legislation and it was the first to pass legislation last year to raise the minimum wage to $10.10 an hour by 2017.
Legislation backed by labor advocates this year seeks to fine big corporations like Wal-Mart $1 per hour for each employee paid $15 per hour or less. The fiscal note estimates that about 146,710 of the 743,328 employees who work for companies with at least 500 employees would be covered under the bill. The bill would result in a revenue gain to the state of up to $152.6 million in 2016 and $305.1 million in future years.
Proponents of the legislation say that because these 146,710 employees are underpaid, they are forced to rely on state programs and subsidies for health insurance and childcare. Since funding is on the chopping block this year for those subsidized programs, they are hoping the new revenue from this legislation will help fill in the gap.
“This is how we’re going to have a middle class in America,” state Rep. Peter Tercyak, D-New Britain, said.
Sen. Ed Gomes, D-Bridgeport, Tercyak’s co-chairman on the Labor Committee, said there are 29,000 millionaires in the state of Connecticut where the minimum wage won’t be $10.10 an hour until 2017.
“People who working for minimum wage can’t even afford a decent apartment,” Gomes said.
He said he understands they have a long way to go to rebuilding the middle class, but his constituents can’t wait until the minimum wage gets increased. He said this bill, which levies a fine on large employers, will help because it holds large corporations accountable.
“Why should these employees have to rely on state assistance to feed their families?” Gomes said.
But business organizations and the conservative Yankee Institute for Public Policy say the legislation will hurt Connecticut’s business climate.
“Taxing businesses that either can’t or don’t pay $15 per hour guarantees only one thing: Fewer jobs for the people who need them most,” Yankee Institute President Carol Platt Liebau said Thursday.
Tercyak bristled at the notion that it was a tax.
“It’s just paying your fair share,” Sen. Marilyn Moore, D-Trumbull, said. “We see it as them just paying their fair share. We’re not calling it a tax.”
Whatever it’s called, Liebau said it doesn’t matter what the legislature does. The big companies it is targeting — like Wal-Mart and fast food chains like Burger King — will be fine because they will “cut jobs, automate, or follow the lead of so many other businesses and leave Connecticut altogether. But employees will suffer if this bill passes, and that is wrong.”
Eric Gjede, assistant counsel at the Connecticut Business & Industry Association, said the legislation likely will lead to big businesses cutting back workers’ hours, but beyond that it will have a profound impact on the business climate in the state.
“Businesses across the county look at legislation like this and make the choice to grow their business elsewhere,” Gjede testified last month. “The result is lost job opportunities for Connecticut citizens, and the loss of good corporate citizens that give back to their local communities.”
Local elected leaders don’t see it that way.
“It’s about building the economy from the ground up,” Middletown Mayor Dan Drew said.
He said it’s about making sure that people who go to work every day to support their families can work without falling into poverty.
“Nobody should be working as hard as people work and still be in poverty,” Drew said. “You shouldn’t have to work 40, 50, and 60 hours a week and not make a living wage. It’s just morally wrong.”
Labor advocates are planning to hold a rally on April 15 to show their support for the legislation.