Hartford (March 26, 2014) –
Governor Malloy’s and the General Assembly’s sudden enthusiasm for another
minimum wage hike, which is expected to pass the Legislature today, and the new
round of higher costs it will impose are unsettling to Connecticut small
businesses, said the National Federation of Independent Business (NFIB) today.
“Not long ago Connecticut small business owners were
slightly encouraged by the reservations publicly expressed by state
policymakers about how a large minimum wage increase would affect small
businesses and the economy,” said NFIB Connecticut State Director Andrew
Markowski. “Today they will pass, and some of the same people will celebrate,
an even bigger increase before the last one was fully implemented.”
“The erratic way in which this was advanced is as damaging
as the practical cost,” he continued. “It is now impossible for small
business owners and potential small business investors to anticipate big policy
changes like this in Connecticut.”
With over 40 days remaining in the 2014 session, the
Legislature is expected to jettison its own rules today so both chambers can
pass an increase in the minimum wage to $10.10 per hour. Just last year
they passed a bill to raise the rate to $9 per hour, which small business
owners are still trying to absorb.
“Many small business owners were disappointed by the
increase last year but partially relieved that the issue was behind them.
Suddenly it’s back and it’s bigger,” said Markowski. “They must be
wondering what’s next, and who could blame them?”
Raising the rate will harm small business owners, making
it tougher for them to make a living in Connecticut, already a very difficult place
for all but the biggest corporations. Experts predict it will also cause damage.
Several weeks ago the nonpartisan
Congressional Budget Office (CBO) predicted that a similar proposal at the
federal level would cause more than half a million jobs to disappear. This week 500 economists,
including three Nobel Laureates, signed a letter
urging federal policymakers not to raise the rate because of the damage it
would cause. And the University of
Connecticut just
this week published a review of recent research
predicting that the most recent increase in the minimum wage to $8.70 per hour –
well below today’s proposed increase — would hurt some industries.
“All of this research confirms what small business owners
already know, which is that higher labor costs hurt profitability and reduce
the demand for new workers,” said Markowski.
“Other states are competing with each other to promote small business
and Connecticut is competing for a place among the states with the highest
costs. It makes no economic sense.”
Markowski said that small business owners are hoping the
Legislature adjourns without any more surprises or other anti-business measures.
“That’s a very uncertain prospect now,” he said. “All it would take is for another
anti-business measure to become suddenly fashionable and we could be back here
next week.”
To learn more about NFIB please visit www.nfib.com.
