EPI Calls on Connecticut Legislature to Uphold Minimum Wage Veto

Research shows the Legislation Hurts Those it Claims to Help
  • Publication Date: June 2008

  • Topics: Minimum Wage

WASHINGTON DC – Today the Employment Policies Institute (EPI) encouraged the Connecticut legislature to uphold Governor Jodi Rell’s veto of HB 5015 which would increase the state’s minimum wage twice in the next 18 months.

New analysis of Census Bureau data by Dave Macpherson of Florida State University shows that the bill would cost the state over $25 million dollars and an estimated 500 jobs. Worse, those who will benefit from the wage hike aren’t in low-income families. The new data show the average family income of those benefiting from the hike is nearly $75,000 per year.

Unfortunately, the 500 lost jobs will be concentrated on those Connecticut workers with the fewest skills. According to economist David Neumark of the University of California at Irvine, for every 10 percent increase in the minimum wage, employment for high school dropouts and young black adults and teenagers falls by 8.5 percent.

“Decades of economic research clearly demonstrate that minimum wage hikes result in job loss for the most vulnerable members of the economy,” said Rick Berman, Executive Director of the Employment
Policies Institute. “The unintended consequences of this legislation is pricing low-skilled working Connecticuters out of the job market and increasing unemployment among those groups that need help the most.”

“Implementing a state level Earned Income Tax Credit would be a vastly superior method for benefiting the working poor, without any of the negative unintended consequences,” Berman concluded.