Minimum wage remains a hot topic at the State House this year as more than four bills have been introduced in the House and Senate calling for an increase in the state’s minimum wage rate, as well as yearly adjustments based on the northeast region cost of living index.
But as in past years, the measures aren’t receiving much support from the business community.
"I definitely think there are more opponents than there are proponents of these bills," said Terry Martiesian, executive director of the Rhode Island Chapter of the National Federation of Independent Business (NFIB). "We are already at the high end when it comes to minimum wage, and something like this that would raise that, could have serious affects on the state’s small business community."
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Rhode Island’s minimum wage is currently $6.15 — $1.00 above the federal minimum wages standards, but 55 cents below Connecticut and 60 cents less than Massachusetts. The proposed measures call for raising the minimum wage to $6.75 – equaling Massachusetts.
To raise the standard now, said University of Rhode Island Economics Professor Leonard Lardaro, would only serve to make Rhode Island less attractive to new businesses relocating in the area.
"We as a state don’t have a stellar reputation as good for business," he said. "I wonder if we are taping a sign on our backs saying ‘kick me.’ No, the sky won’t fall but it could certainly transform things in ways that are a little more profound than I think even proponents can imagine."
What concerns Lardaro is linking the state’s minimum wage rate to the cost of living index.
"There is still some room to move (the minimum wage) up without having that much of an affect," he said. "But when you start adding two or three percent every year and other states are freezing then you are going to surpass them, and surpass them quickly. Companies don’t have to stay here, and this could be incentive for them to leave."
Martiesian agreed. He pointed out that only two other states tie minimum wage to the index.
"We are in competition," he said. "Why aren’t other states doing this? People just don’t realize what the implications would be."
According to Rep. Paul Sherlock, a Warwick Democrat who introduced legislation for the third year in a row this year to link the state’s minimum wage with the cost of living index, it’s about taking the politics out of the debate.
"If you don’t have anything that is automatic than it becomes a political thing every year," he said. "The CPI is a fairly standard barometer and I believe that’s what is used for social security."
Martiesian thinks politics will still be very much at play even if the legislation passes.
"It’s going to affect the small businesses of our state," he said. "A lot of small business, the convenience store on the corner, the hardware store, they can only afford so much. A lot of them just can’t afford this."
What’s more in industries like manufacturing where there is often a raise in pay after 90 days, the effects could be devastating, Martiesian said.
"This type of wage applies mostly to the entry level job," he said. "There has to be an increase at some point, and many companies have workers that aren’t even at this level yet. It’s problematic."
Lardaro agreed.
"Some jobs start low so they can do training," he said. "This could lock that out. I don’t think that is something the state needs to be doing now."
The measure has failed to get out of committee in both the House and Senate the last two years. Both labor committees are currently hearing it.
