by Christian Wade
Wages will rise for hundreds of thousands of low-skilled workers in Connecticut next year under a 2019 law that pegs the state’s minimum wage to the federal employment index.
Beginning Jan. 1, Connecticut’s wage floor will rise from $15.00 per hour to $15.69 per hour as a result of the state’s first-ever economic indicator adjustment.
Gov. Ned Lamont called it a “fair, modest increase” and said the extra money earned by workers “will be spent right back into our own economy and support local businesses.”
“The minimum wage for many years remained stagnant, making existing pay disparities even worse and preventing hardworking families from obtaining financial security,” he said in a statement.
In 2019, Lamont signed Public Act 19-4, which called for five annual increases in the state’s minimum wage between 2019 and 2023, followed by future adjustments tied to the percentage change in the federal employment cost index.
By doing so, Connecticut became the only state to index the minimum wage to the Employment Cost Index, which is a measurement of changes in the hourly labor cost to employers over time, according to the U.S. Bureau of Labor Statistics.
Lamont and other backers of higher wages say workers are still struggling to make ends meet in Connecticut, where the overall cost of living remains higher than many other states in the Northeast region.
But the state’s business community argues that regular wage hikes will put the squeeze on employers, prompting belt-tightening, layoffs and ultimately higher prices for consumers.
Under the law, the state’s minimum wage is adjusted according to the U.S. Department of Labor’s calculation of the employment cost index for the 12 months ending on June 30 of the preceding year.
The law requires the Connecticut Department of Labor to review the percentage change and disclose pending adjustments by Oct. 15 each year.
The employment cost index rose by 4.6% over the 12 months ending on June 30, 2023, Connecticut Labor Commissioner Danté Bartolomeo said, accounting for a $0.69 increase to the state’s minimum wage.
“This increase will benefit Connecticut’s 160,000 to 200,000 minimum wage workers and help offset some of the effects of national economic challenges, such as higher energy costs and interest rates,” Bartolomeo said.
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Christian Wade is a contributor to The Center Square.