(WTNH) — Starting Tuesday, the estimated 330,000 workers earning minimum wage in Connecticut will be seeing an extra dollar an hour in their paycheck. On the one hand, this will help a lot of frontline workers. But on the other, small businesses are worried about their bottom lines.
This is a win for many who had to work and are still working through the pandemic. Starting Sept. 1, the minimum wage will be raised to $12/hour. That means many who work for fast food chains, grocery stores, and even some in health care settings will be seeing a pay increase.
But for small business owners who are struggling right now, this wage boost keeps them up at night.
Governor Ned Lamont was asked what he felt about this wage increase at a press conference Monday. He said, “A lot of them were bagging your groceries or providing food, or some of them work in a daycare. And I’m proud of the fact that Connecticut recognizes that and they’re going to get a dollar an hour raise during this time starting tomorrow.”
State Director of the National Federal Independent Business group (NFIB) Andy Markowski said, however, this is the last thing small business owners want right now:
“Small business owners are apprehensive about the wage increase and rightfully so. They’ve been apprehensive about economic conditions for the last several months now. And for many small business owners, the last thing they need is an increase in their labor costs.”
The NFIB represents small business owners across Connecticut. Markowski says even though many took advantage of the Paycheck Protection Program (PPP), they are dealing with added costs like buying protective equipment. Plus, many have lost customers during the pandemic.
He says many of his members worry they won’t be able to stay open the next six months and this wage increase might speed that up.
For those in the restaurant industry, the increase is enough to cause sleepless nights.
“I don’t sleep well at night,” said Scott Dolch of the Connecticut Restaurant Association. “Just trying to worry about the future of this industry.”
Dolch says during the pandemic shutdown, the food industry lost millions. At least 90 eateries have closed, 80,000 workers laid off. At only 50% capacity for indoor dining, many owners are barely surviving. Winter, he says, will freeze outdoor dining.
“All the servers and bartenders working outside right now, you know, if we don’t have the outdoor space for dining or consumer confidence, if they’re not willing to come inside to eat, how that’s going to impact that, as well, so it’s a lot to digest.”
Add to that increased labor costs.
“It’s hard to argue anyone else has been hit harder. The unknown is worrisome,” added Dolch.
The minimum wage law passed last year includes increases over the next several years. Then in January of 2024, the increases will be tied to the employment cost index. For the first time in state history, the rate will grow with economic indicators.
· $12.00/h on September 1, 2020
· $13.00/h on August 1, 2021
· $14.00/h on July 1 2020
· $15.00/h on June 1, 2023.
Federal minimum wage is currently $7.25 an hour.
It’s not only service industry workers. Grocery store clerks are affected, too.
State Office of Fiscal Analysis estimates municipalities will spend $24 million in costs this year alone due to the wage increase.
For a city like New Britain, that’s an increase of $46,000 dollars in yearly wages for the parks and recreation staff, which includes camp staff, after school programs, lifeguards, and golf course staff.
Governor Lamont was asked whether he would freeze the increase because of the pandemic: “I’m proud of the fact that Connecticut recognizes that (hard work) and they’re going to get a dollar an hour raise during this time.”
Scott Dolch says he spoke with Lamont last week about workarounds while honoring the COVID rules: “If people can put up plexiglass inside their booths…you know, can they just get more seating but still keeping people safe…Instead of blanket capacity rules…We are working through that.”
Lawmakers are working on getting more funding for another round of the paycheck protection program. But for some restaurants, it may be too late.