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Legislation Would Make Employers Pay for Low Wages

Low wages cost Connecticut $486 million for Medicaid and other benefits. (Benjamin G. Robinson/Wikimedia Commons)
Low wages cost Connecticut $486 million for Medicaid and other benefits. (Benjamin G. Robinson/Wikimedia Commons)
March 11, 2016

HARTFORD, Conn. - Connecticut lawmakers are looking at a bill that could help recover the cost of support services for low-wage workers.

The state pays more than $480 million a year in Medicaid and other benefits for workers who don't earn enough to get by at low-paying jobs. This week, the General Assembly's Human Services Committee heard testimony on Senate Bill 391, which Paul Filson, director of the Connecticut State Council of the Service Employees International Union, said would make companies that pay less than $15 an hour pick up the tab.

"The low-wage model essentially subsidizes profits of low-wage corporations," he said, "which we don't believe the state should be in the business of doing."

The proposal would apply only to companies with at least 500 employees. Opponents have said it would hurt small business and eliminate jobs in the state. But according to Filson, a study by the University of Connecticut found that a similar bill proposed last year would have resulted in a net job gain. This year, with a looming budget deficit and the governor calling for across-the-board spending cuts, he said he thinks the bill is even more necessary.

"We feel like this would actually help prevent those kinds of service cuts," Filson said, "and potentially would increase the number of jobs in the state."

The Office of Fiscal Analysis said the earlier version of the bill would have added more than $300 million to the state Treasury.

Wilson said both Democrats and Republicans on the Human Services Committee responded well to testimony in favor of the bill at this week's hearing. If passed, he said, it would send a clear message to corporations making billions and paying low wages, that they owe something to the state.

"They need to be responsible employers," he said. "They need to be held accountable for their model, and the public demands higher wages and better services for working people."

The committee has two weeks to send the bill on to the Senate.

Details of the bill are online at cga.ct.gov.

Andrea Sears, Public News Service - CT