Is Connecticut the First Domino in a Higher National Minimum Wage? Not So Fast.
Everything you need to know about the state's minimum-wage hike.
On Thursday night, Connecticut became the first state in the country to raise its minimum wage to $10.10 an hour — the wage President Obama envisioned in his State of the Union address as becoming the new national standard.
Connecticut Gov. Dannel Malloy — who's up for reelection this year — has been pushing hard for the measure. Thursday night, Malloy signed the bill into law at the same restaurant he visited with Obama and other New England governors to promote the law a month ago.
Though superlative, the Connecticut law isn't as extreme as it may seem — it will raise the minimum wage to $10.10 on Jan. 1, 2017, with incremental increases over the next three years. Connecticut's minimum wage is currently $8.70.
While no other state measures up to Connecticut, some cities do. San Francisco's minimum wage, for example, is currently $10.74. As a state, California plans to increase its minimum wage to $10 by 2016. All told, 23 states and the District of Columbia now have a minimum wage higher than the federal rate. But those state wages are unlikely to go any higher, absent a federal raise.
The Connecticut law plays into a nationwide agenda set by the Obama administration to raise the minimum wage. Both Obama and Vice President Joe Biden have been campaigning for better worker conditions, visiting wage-raising businesses like Costco, the Gap, and the Florida Avenue Grill in D.C. (Costco is, coincidentally, a big Democratic donor.)
"I support these efforts, and I commend Governor Malloy for his leadership," Obama said in a statement. "But to truly make sure our economy rewards the hard work of every American, Congress must act. I hope members of Congress, governors, state legislators, and business leaders across our country will follow Connecticut's lead to help ensure that no American who works full-time has to raise a family in poverty, and that every American who works hard has the chance to get ahead."
Obama and Democrats in Congress want to raise the federal minimum wage from $7.25 to $10.10. Minimum-wage workers have not seen a federal raise since 2009, despite growing inflation and a limping economy.
But conservatives say raising the minimum wage will hurt businesses and prevent them from hiring more employees. Budget number-crunchers have said that although a higher federal wage would help some low-wage families rise above the poverty line, the share of low-wage workers with jobs would also slightly decrease.
According to a report by the Congressional Budget Office that has been seized upon by Republicans, raising the federal minimum wage to $10.10 an hour would reduce total employment by 500,000 jobs. But it would also mean roughly 16.5 million low-wage workers would have higher earnings.
Economists say raising the wage would actually stimulate the economy. That's because, more than any other group, low-wage workers are more likely to spend their extra earnings. While high-income earners can afford to squirrel away their income for years, low-wage workers inject their money back into the economy directly to pay for basic goods and services.
This is the second time in two years that Connecticut has voted to raise its minimum wage. Still, in a recent Quinnipiac University poll, 71 percent of Connecticut voters said they supported raising the minimum wage yet again. A Bloomberg poll found that 69 percent of Americans nationwide support raising the wage to $10.10 over the next three years.
But the measure is unlikely to pass at the federal level, due to opposition from House GOP members. Back in January, Speaker John Boehner balked at Obama's decision to raise federal contractors' wages to $10.10 an hour. "The question is how many people, Mr. President, will this executive action actually help?" Boehner told reporters. "I suspect the answer is close to zero."
Some Connecticut workers probably wish their new state law would come into effect earlier than 2017. But for the majority of other states, passing a minimum wage above $10 is a lofty goal in itself. The American Legislative Exchange Council distributes a legislative agenda to conservative state lawmakers nationwide, which makes their actions a good barometer for the future of the minimum wage in red America.
Since 2011, ALEC-backed lawmakers in 25 states introduced 67 bills to reduce the minimum wage or weaken overtime protection for workers. Eleven of those bills eventually became law. So Republican state lawmakers — who control 26 statehouses in the country — are not keen on passing a minimum-wage hike.
Just as Colorado and Washington have been the guinea pigs for legalized marijuana, Connecticut will be a guinea pig to see how a higher minimum wage will affect business in the state. And while other states aren't exactly clambering to follow Colorado's lead and legalize marijuana, governors can also see the state's economy hasn't exactly gone to hell, either.