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As CT raises the minimum wage, workers worry about rising costs

Young woman looking at the receipt from the grocery store at night. Close-up.
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Over one-third of households in Connecticut can't afford essentials, including housing, utilities, childcare, food, transportation, healthcare and taxes, according to a report released by the Connecticut United Way.

On a regular trip to the grocery store in March, Kendra McGarrell was struck by how little she could buy with her budget of $100.

Every year, it seems to McGarrell that her money covers less and less of her basic necessities.

“Now a $100 purchase is definitely not getting me the things I want and barely getting me the things I need,” McGarrell explained. “I’m speechless because certain items shouldn’t be so much.”

McGarrell is a 30-year-old single mother living in Hartford County, employed as a customer service specialist earning Connecticut’s minimum wage that now stands at $15.69 an hour.

She’s tasked with footing the bill for her and her daughter’s basic needs on a budget she said is becoming increasingly difficult to manage as the cost of living rises.

The state legislature passed a bill in 2019 enacting a series of yearly increases to Connecticut’s minimum wage, until it reached $15 per hour in 2023. Lawmakers agreed that after five scheduled increases, the minimum wage would continue to be adjusted annually based on changes in the federal employment cost index.

The first of these adjustments took effect at the start of 2024, when Connecticut’s $15 minimum wage increased to $15.69.

Despite these wage increases, many families, like the McGarrells, still struggle to afford basic necessities. In fact, over one-third of households in the state can't afford essentials, including housing, utilities, childcare, food, transportation, healthcare and taxes, according to a report released by the Connecticut United Way.

High prices cost families more than just their access to these necessities, said Takima Robinson, chief program officer of Advancing CT Together.

Advancing CT Together is a non-profit organization that provides low- to moderate-income households with resources to overcome financial barriers. Services include tax preparation services, financial counseling and financial literacy courses.

Robinson, who oversees the operation of these programs, said her previous role as a service worker required her to regularly come face-to-face with the effects of poverty.

Robinson said that when she explains how Advancing CT Together works in close partnership with the Fairhaven Community Health Clinic, she is often met with surprise. Why does an organization centered on financial improvement need to work with a health clinic?

The link between mental and physical well-being is more intertwined with money than one might think, Robinson explained.

“If you can’t pay your rent, if you can’t pay that light bill, if you’re behind on things, it’s going to take an effect on you,” Robinson said. “It could take an effect on your mental health and then it can take an effect on your physical health.”

These health consequences are not only felt by the primary provider of a household but, ultimately, by the entire family. “If you have children, those effects trickle down to the children as well,” she added.

Even with Connecticut’s consistent growth in the minimum wage, economic insecurity effects are still felt by thousands of families daily, Robinson said.

“OK, the minimum wage went up,” Robinson said. “But so did rent. So did food. So did car insurance. Everything’s going up too.”

The rising cost of living, she added, continues to cancel out the benefits that higher wages are intended to bring for workers. Whether the change in minimum wage is from $7.25 to $15 or $15 to $15.69, Robinson said, these increases are not large enough to cause a genuine difference in the economic status of low-income families.

“It has to be a significant increase in order to move that scale,” she said.

The minimum wage has been a subject of debate ever since its initial introduction to the American labor market in the early 1900s, according to Kenneth Couch, an economics professor at the University of Connecticut who specializes in research on minimum wages.

Minimum wage was first implemented as a preventative measure to bar employers from taking advantage of vulnerable workers. By paying exceptionally low wages, employers could essentially force laborers to work excessively demanding schedules in order to make a livable income. Without regulations in the labor market — wages and working hours — people, individually, could not bargain effectively with large employers, Couch said.

The implementation of minimum wage allowed workers to advocate for more reasonable schedules, Couch noted. This eventually led to the reduction from what was once a six-day work week to today's normal work week of five days.

Over time, the minimum wage was gradually applied to different industries and occupations. After a federal minimum wage was established in 1938, some states, counties and even towns began to raise their own above the federally established minimum.

“Connecticut has a long history of whenever the federal minimum wage gets passed, Connecticut always almost immediately sets theirs higher,” Couch said. Currently, Connecticut’s minimum wage of $15.69 is more than twice the federal minimum wage of $7.25, which has remained unchanged since 2009.

“In the past when the minimum wage went up, I think it was more of a political statement,” Couch said.

This motivation is evident by the seemingly insignificant amount the state had increased its minimum wage. Oftentimes, Connecticut would set its minimum wage no more than a dime higher than the national amount, Couch added.

“But what’s happened recently,” he said, “is arguably more progressive in the sense of wanting the minimum wage to be more supportive of the cost of living in the state.”

But the number of families in Connecticut still unable to attain economic security is indicative of the major gap between the cost of living and the wages these households are earning. It raises a question of why the lawmakers are willing to increase the minimum wage without relieving other ongoing economic burdens.

According to Couch, the answer might just lie in a simple misunderstanding of what the primary purpose of a minimum wage is. Much of the debate over the minimum wage stems from whether it should be viewed as a livable income or a starting salary, from which a worker’s income will inevitably increase.

While there is no definitive answer to this question, Couch said his approach involves looking at the real-life circumstances of minimum-wage earners.

“The way I look at it is: Who actually earns the minimum wage?” Couch said. “What research has shown is that, overwhelmingly, the people earning the minimum wage are not the head of household. They’re typically bringing a second or third paycheck in.”

Many minimum-wage earners are teenagers or young adults working part-time jobs or not in a position where they provide the primary income to their household. These individuals, in most cases, do not view their earnings as a living wage, according to Couch.

While most of those making minimum wage do not fully rely on it, there are still many workers with families who do. These instances should not be ignored, Couch argued.

For these workers, there is a substantial difference between making $15 per hour vs. $7.25, according to Couch. But, like Robinson said, there is only so much these low wages can guarantee in terms of basic necessities.

“Someone making $15 per hour would roughly make $30,000 a year,” Couch said. “In Connecticut, we know that on your own making that you’d really be struggling.”

Even those who are not wholly reliant on minimum wage can still benefit from its increase, Couch added.

“Some people view it as being useful to raise the minimum wage because it helps bring extra income into even middle-class families,” he said. “Connecticut is an expensive place to live.”

While raising the minimum wage results in boosted earnings for workers, regardless of their dependence on it, concern lingers over its potential consequences. A pressing question remains: Could raising the minimum wage harm low-income households more than good?

Robinson said in some cases, it can.

Through an effect called the “benefit cliff,” families are prematurely cut off from crucial social services once they make over a certain income, which can occur as a result of raising the minimum wage. This typically happens once a family is on the verge of attaining greater economic security, but their disqualification from certain social benefits keeps them trapped under the poverty line.

“They say they’re still struggling, but make too much to qualify for Medicaid, or SNAP, or any program like that,” Robinson said, referring to the many households she has seen affected by the benefit cliff.

In addition to raising wages, government agencies must also prioritize giving the affected parties more time to keep these safety-net resources, Robinson said. This would give them an adjustment period, during which they can truly reap the benefits of their new income.

When it comes to helping households, like the McGarrells, raising the minimum wage alone is not enough to defeat deeply rooted economic hardship, Robinson said. Social services must be simultaneously acknowledged and maintained in order for minimum-wage earners to truly achieve economic growth.

“Follow that individual, help that individual,” Robinson said. “Give them a time limit where it’s going to make a difference and it’s going to help them, not burden them even more.”

Regardless of how much the minimum wage is increased by, its impact on Connecticut families will be limited unless it is accompanied by the proper utilization of social services.

“That is what’s going to help people move from poverty to prosperity,” Robinson said.

Learn more
Small business owners in Connecticut react to the changes to the state's minimum wage.

An indexed minimum wage puts Connecticut ahead of other states in New England. Here's how it happened and what it means.

Sophia Birnbaum is a journalism student at the University of Connecticut. This story is republished via CT Community News, a service of the Connecticut Student Journalism Collaborative, an organization sponsored by journalism departments at college and university campuses across the state.

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