Rhode Island again is considering an increase in the minimum wage to stay competitive with surrounding states, including Massachusetts.
Among New England states, only Connecticut and New Hampshire have a lower hourly wage floor than Rhode Island, though local business leaders say they are still trying to absorb recent increases.
If the General Assembly approves the initiative, contained in Gov. Gina M. Raimondo’s budget proposal for fiscal 2020, the minimum hourly rate would climb for the third consecutive year, this time by 60 cents, to $11.10.
The impact on the state budget is negligible, officials say, because except for seasonal workers, most state workers are paid above this rate. But the state has not conducted a study of what the latest proposed increase might mean for the local economy, according to an R.I. Department of Labor and Training spokesperson.
Lobbyists and elected officials offered competing views in a recent hearing before the House Finance Committee.
Advocates for the change argue every dollar added to a low-income worker’s take-home pay will be injected back into the local economy.
A 2018 study by the Institute for Research on Labor and Employment at the University of California, Berkeley found no discernible impact on employment levels following increases in the minimum wage. It looked at the employment of restaurant workers in six cities that had increases in the minimum wage.
Each of the cities at the time of the data were paying between $10 and $13 an hour.
The study was cited by Alan Krinsky, senior policy analyst for the Providence-based Economic Progress Institute.
In the Ocean State, only 1 in 10 minimum-wage workers is a teenager. Most are adults and one-quarter have children, he said.
“These are people who need a living wage,” he said.
A lobbyist for the Greater Providence Chamber of Commerce, speaking against, urged legislators to undertake an economic study to determine whether the state’s minimum wage should be based on the local cost of living, which in Greater Providence is well-below that of other regional cities, including Boston and Hartford.
“We’ve been raising it relative to other states without looking at the cost of living in Rhode Island,” said Elizabeth Suever, a lobbyist for the Chamber.
Lenette Forry, an attorney who represents the Northern Rhode Island Chamber of Commerce, as well as the Rhode Island Hospitality Association, also called for a study of the effects. The increase would not only impact wages, she said, but associated costs for business, including worker’s compensation and unemployment insurance.
Christopher Carlozzi, the Rhode Island state director for the National Federation of Independent Business, noted the state hiked the minimum wage three months ago, the second tier of a phased increase.
Small employers have not adjusted to the last increase, and now are being asked to absorb another, he said.
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.
