By: Brittany Hill
At the forefront of President Obama’s speech last Wednesday at Central Connecticut was the push to raise our country’s federal minimum wage. The president’s decision to speak at CCSU remains a question, but some possible answers have arisen. The campus has close proximity to Bradley International Airport, and former president George W. Bush spoke here a few years back.
But perhaps the President spoke here because the university is located in a city where nearly one in four residents are living below the poverty line.
Although Connecticut has one of the highest minimum wages in all of the United States, the 2012 U.S. Census shows that 22.9 percent of New Britain residents live below the poverty line, a figure that more than doubles that of Connecticut’s.
“New England needs to lead on this issue,” stated Gov. Dannel Malloy, regarding raising the minimum wage in his introduction to President Obama’s speech. Malloy sees a direct correlation between poverty and minimum wage.
“We believe this is the best thing we can do for lifting people out of poverty,” he stated in a conference call with Rhode Island Gov. Lincoln Chafee, Vermont Gov. Peter Shumlin and White House Press Secretary Josh Earnest to discuss minimum wage on the Sunday prior to Obama’s visit.
But questions still remain over whether raising the minimum wage will lessen the number of Connecticut residents living in poverty.
Economist Arindrajit Dube thinks so. He released a study at the very end of last year, titled “Minimum Wages and the Distribution of Family Incomes,” which finds a negative relationship between minimum wage and the poverty level. He believes that within the first year of raising the minimum wage 10 percent, poverty would decrease by 2.4 percent. Furthermore, he predicts that after the first year there will be a 3.6 percent decrease in poverty.
“You can’t have a part of society that is nearly dysfunctional and have a strong country,” said Paul Karpuk, English professor at CCSU aftering seeing Obama speak on campus.
Other governors throughout New England also feel that a strong middle class is essential for a strong economy.
“Any society wants a strong middle class, and this middle class is under tremendous stress,” said Gov. Chafee of Rhode Island in the conference call last Sunday. Chafee previously served in the United States Senate as a Republican until 2007.
This past January, Connecticut raised its minimum wage to $8.70 an hour, an increase of 45 cents from the year prior. Gov. Malloy mirrors Obama’s incentive to raise the minimum wage incrementally so that by 2017 the minimum wage would rise to $10.10 in Connecticut and federally.
Some of Connecticut’s local businesses have independently taken the initiative to pay their workers above the state’s minimum wage already. One of these, a locally-owned New Britain restaurant, has paid their workers over $10 an hour since day one in December.
“It’s not what we like to pay our workers,” said Rob Chiovoloni, owner of Cafe Beauregard in New Britain, “it’s what we pay for what they do.”
Chiovoloni had no idea that his decision to pay his workers a living wage would attract the attention of President Obama. Before his speech at CCSU last Wednesday, Obama, along with Malloy, Chafee, Shumlin and Massachusetts Gov. Deval Patrick, all showed up for lunch at Cafe Beauregard.
Throughout his 50 years of experience working in food service, Chiovoloni has found a strong correlation between how workers feel at their jobs and their level of effort.
“Part of what we found out is by giving people a more respectable raise, we get a great deal of work and great passion,” said Chiovoloni.
His wife, Alice Bruno, can attest to this notion confidently.
“One thing I see is that they feel respected and are very respective of him,” she said.
Although Cafe Beauregard pays their workers considerable wages, this is not the case for the majority of food service workers in the United States.
The Bureau of Labor Statistics reports that in 2012, leisure and hospitality accounted for nearly 19 percent of those earning at or below the federal minimum wage – the most workers in all the industries that earn minimum wage or less. A majority of these workers are employed in restaurants and other food services.
Employees at fast-food restaurant chains, such as McDonald’s and Burger King, began rallying for “living wages” in 2012. At one point, protesters were demanding that workers earn up to $15.00 an hour. With students representing a large number of these minimum wage recipients, those in opposition to raising the minimum wage question why a young adult would pursue a college degree when a decent working wage is waiting right around the corner.
“I have seen this cycle over the years,” said Edward Rensi, former McDonald’s U.S. CEO, in an interview with FOX last August. “It was designed for entry level jobs that teach people soft work skills. It was never meant to be a career, it was meant to be a career starter.”
He says that as a country we should focus more on creating career-driven jobs rather than committing so much energy to the low-skilled workers.
“They ought to be talking about real jobs that people can grow into to become real careers,” said Rensi. “It’s nonsense, it’s political, it’s inflationary and it will never work.”
However, as Karpuk argues, though an increase in the minimum wage could negate the purpose of attending college, it’s only to a certain extent.
“[Graduates] might be able to make a fairly high wage doing manufacturing but its not going to have much upward mobility,” said Karpuk. “If [students] want to do something that is mentally or intellectually challenging, they’re going to need a higher degree.”
Karpuk attended Obama’s speech discussing minimum wage, and could relate to Obama’s discontent at the argument that the raise will only benefit young people. Obama asked the crowd, “Well, what’s wrong with that?”
“Most of my students work outside. Some of them work and take a full load,” said Karpuk. “They can acutely feel this.”
The Bureau of Labor Statistics showed that in 2011, workers under age 25 accounted for 23 percent of those earning the minimum wage or less, while those age 25 accounted for only three percent of people earning the minimum wage or less. With almost a quarter of New Britain residents being under 18-years-old, according to the 2010 Census, there is worry that this money allocated for raises will leave many unemployed.
“When jobs disappear, those with the least education, training skills, and experience suffer the most,” wrote Doug Bandow, a senior fellow at the Cato Institute in his article, “Raising Minimum Wage Will Hurt More than Help.”
But as past trends have shown, with every gain there will be a loss, at least according to Jeanne Sahadi, a senior writer for CNN Money. Though she asserts that raising the minimum wage would take 900,000 people out of poverty, she also believes that job losses are inevitable.
“A higher minimum wage raises payroll costs for an employer. That employer may handle those higher costs in any of several ways: cut jobs, reduce worker hours, curb summer hiring, opt not to replace workers who leave; book lower profits; or raise prices on customers,” she explained in a CNN article. “Raising minimum wage would ease poverty but cost some jobs.”
But not all national and local businesses are worried about needing to cut jobs. New Britain’s own feel that their fate is independent from the wages of their workers.
“We aren’t going to be going out of business because of what we pay our workers,” said Chiovoloni.
But that is something many companies, large and small, fear. With about 5.2 percent of hourly-waged workers earning at or below the minimum wage nationwide, the increase seems economically irrational to some but socially vital to others. As for Karpuk, “It’s just a matter of the society being healthy.”
