Increase in the Minimum Wage

Posted on July 6, 2022

The minimum wage went up on July 1, from $13.00 per hour to $14.00 per hour. Next June 1, 2023, it will finally reach $15.00 per hour as decreed by the minimum wage law Governor Lamont signed in 2019.

See the Governor’s comments on the latest wage hike here, where he calls it “a fair, gradual increase for workers who will invest the money right back into our economy and continue supporting local businesses in their communities.”

By this logic, we are increasing pressure on small businesses in order to help small businesses. See this quote from Henry Hazlitt’s book “Economics in One Lesson.” Substitute $14 per hour into the quote, and you get the principle that today we have just outlawed in Connecticut all work that could be done valued at less than $14 per hour.

Think of start-ups by single moms, fresh ideas by young people, or summer jobs for teens. Couldn’t some of these get going with a few employees at $10 per hour? Wouldn’t that be wonderful? Imagine the creative energy and burgeoning wealth creation that could happen even at lower levels of wages. Greatness starts with small beginnings, right?

Consider also what law firm Shipman & Goodwin writes about July’s wage hike – a warning to businesses, beware that in addition to boosting minimum wage to $15, the 2019 law had built-in automatic additional increases to minimum wage each year after $15 was reached. Starting in 2024 minimum wage in Connecticut will be linked to the Employment Cost Index and “employers will have significant pressures on costs not just this year or next, but just six months after that in January 1, 2024.”

Indeed, small beginnings in Connecticut by anyone with entrepreneurial spirit to start a business or to get a starter job to gain work experience will get squeezed out by our state’s ever-increasing minimum wage. Setting a low minimum wage might be understandable so as a society we might agree to some kind of bottom limit, but when minimum wage laws dictate higher and higher wages, we are snuffing out small beginnings.

Thanks to the federalist system of our country, we have 50 different ways to approach minimum wage laws. According to this employment laws site, 20 states have no state minimum wage, seven states have state minimum wages that are less than $15, 13 states have indexed rates that are still below $15, and 10 states have passed $15 minimum wage laws.

In other news:

Today, Connecticut’s Diesel fuel tax is going up 23% or 49.2 cents per gallon, triggered by an automatic adjustment based on average wholesale diesel prices over the prior year. Republicans are calling for a special session to suspend the diesel tax entirely, while our economy is suffering extreme inflationary pressure.

Last but not least, here is a list of the spate of laws that go into effect today, July 1. This is not an easy list of bills to read through, but I am providing it here for your perusal, in case there might be a bill that impacts your area of work or concern.