After a series of annual $1 increases set by the General Assembly, Connecticut’s $15 minimum wage will rise by a relatively modest 69 cents on Jan. 1, the first of the state’s raises pegged to a federal index that tracks wages.
The increase announced Monday by Gov. Ned Lamont is the first computed under the terms of a 2019 law that ends decades of periodic partisan fights over the minimum wage and puts it on an annual autopilot.\
The law requires the state to automatically raise the minimum wage each year based on the Employment Cost Index, a measure of wage growth calculated by the federal Bureau of Labor Statistics.
“I think work should pay,” said Lamont, a former businessman who has straddled a line between labor and business.
The Democratic governor has fought fiscal policies he deems a drag on economic growth, but he delivered on two promises to labor in his first year in office: Raising the minimum wage, and creating a paid family and medical leave.
Lamont announced the new minimum wage in Windham, a community of 24,000 that is the largest in northeast Connecticut and one of the poorest in the state. The mayor, Tom Devivo, said it ranks second-to-last in wages.
The impact will be muted by a tight labor market that has pushed many fast-food and retail employers to set starting wages well above the minimum wage, but Lt. Gov. Susan Bysiewicz said the bump still will mean raises for many.
“We think it’s going to affect approximately 10% of our workforce — 163,151 employees will be directly affected and will benefit with this change to $15.69,” Bysiewicz said.
While business groups fought the passage of the 2019 law, which also raised a $10.10 minimum wage to $15 in annual increments, the head of the state’s largest business group saw little immediate impact due to market conditions.
Connecticut’s wages rose by 4.4% from 2021 to 2022, giving the state the fifth-highest average wages in the U.S., said Chris DiPentima, the president of the Connecticut Business and Industries Association.
“We’re a high-wage state, so I think that increase in minimum wages is probably not a huge issue right now in this environment,” DiPentima said. Recruiting and retention are employers’ biggest labor challenge, he said.
The announcement came on the same day the state Department of Labor reported that Connecticut had recovered all the jobs lost during the COVID-19 recession.
“Let me tell you today, they announced we have now surpassed peak employment in the state — more than we had pre-COVID That’s a big deal. We have 90-plus thousand jobs going unfilled right now,” Lamont said.
Democrats once viewed an automatic minimum-wage increase warily as the loss of a valuable campaign issue.
But in 2019, a year after the Democrats regained strong majorities in the General Assembly, the party opted to enact a permanent mechanism with the support of labor.
“There’s the right thing to do, and there’s the political thing to do,” said Ed Hawthorne, the president of the Connecticut AFL-CIO.
Hawthorne said the advantages of the 2019 law were clear.
“Instead of years where there’s no increases and other years where the minimum wage gets bumped so they can catch up, there’s a steady rise that tracks inflationary trends,” he said. “And finally, setting it means that the minimum wage will no longer be subject to politics.”
DiPentima said business groups still believe that wages should be set by market forces, not the government. A higher minimum wage creates upward pressure on employers that forces higher pay for others.
Lamont said that is a good thing.
“I think help helps keep this economy moving for everybody,” he said.
This story originally appeared on the website of The Connecticut Mirror, www.ctmirror.org.