Connecticut Bill Would Fine Corporations for Low Wages

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Connecticut Bill Would Fine Corporations for Low Wages

Nina Liss-Schultz

Connecticut lawmakers are moving forward with a proposal that could effectively raise the minimum wage of many of the state's low-wage workers to $15 an hour.

Connecticut lawmakers are moving forward with a proposal that could effectively raise the minimum wage of many of the state’s low-wage workers to $15 an hour.

The bill, SB 1044, would subject for-profit companies with 500 or more employees to a fine for every employee who is paid less than $15 an hour, essentially forcing those companies to raise wages or pay if they refuse.

The bill would be the first of its kind in the country.

Connecticut has in the past few years enacted other first-of-its-kind laws to support low-wage workers in the state, among them a 2011 law mandating paid sick leave for the hundreds of thousands of service employees in the state.

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Since then, California and Massachusetts have both approved guaranteed paid sick leave legislation.

Another law, passed in 2014, raises the state’s minimum wage from $8.70 to $10.10 by January 2017. A handful of states have since raised their minimum wages, including Vermont, Massachusetts, and Washington, D.C., which have planned increases that will bring their minimum wages to a level higher than Connecticut’s.

Spurred by groups like OUR Walmart and the Fight for 15 campaign, advocates have set their sights on a more ambitious goal: a $15 minimum wage, particularly for low-wage workers at large corporations.

The bill being considered by Connecticut legislators this year would move the state closer to that goal. Dubbed the “Walmart tax” by proponents, the proposal would fine corporations with 500 or more employees one dollar an hour for each employee who was paid less than $15 an hour for their work.

The money collected would go to state programs for the elderly and disabled, as well as the Office of Early Childhood, to bolster school readiness programs.

Similar bills are being considered in Colorado and Oregon.

“We think it will send a message to the Oregon state legislature and the Colorado state legislature,” Mary Kay Henry, the international president of the Service Employees International Union, told the Hartford Courant. “We’re hoping if these three states can begin to create momentum, then we can begin to do it in other states as well-because we’ve been unsuccessful at the federal level in getting Congress to address” the issue.

Walmart in particular has become a target for lawmakers looking to raise wages, as the company has gained national attention for its low wages. The corporation, which employs 1.5 million people across the country, has about 825,000 employees who make less than $25,000 annually, placing many who have families below the poverty line.

The company’s employees make up 18 percent of the Supplemental Nutrition Assistance Program (commonly referred to as SNAP or food stamp) market, according to a 2014 report by Americans for Tax Fairness.

Though Walmart recently made headlines for raising its minimum wage to $9 an hour, as Rewire has reported, that increase won’t do much to improve the life of its employees. Walmart, even after the wage increases, remains a burden on taxpayers. Taxpayers spend $6.2 billion every year on public assistance for Walmart employees who make too little money to make ends meet, according to one estimate.

To date, only cities have gone forward with mandated wage increases that get close to the $15 an hour “living wage” sought by labor advocates. Seattle and San Francisco in 2014 passed laws to raise minimum wages to $15 an hour, and several other cities, including Los Angeles, are considering similar proposals. Los Angeles’s wage increase would serve as an economic boon for the city, according to economic analysts.

SB 1044 was recently passed out of committee on a party line 11-7 vote, and will go to the full senate for a vote. Both chambers of the Connecticut General Assembly are majority Democratic.