The minimum wage means different things to different people. For the labor community, it is a tool for guaranteeing a fair, living wage for those at the lower rungs of the economic ladder. For small business owners it is a rapidly growing cost that forces them to carefully consider any plans to hire new workers. And for politicians, it is an annual dog and pony show that gives them a chance to earn their credentials as being “pro-labor” or “pro-business.”
Here in Rhode Island, we have seen the minimum wage increase by 20 percent In the last two years. And one proposal currently being considered would increase by another 10 percent. Our state currently offers the sixth highest minimum wage in the country and we are one of just ten states whose minimum wage is higher than the $5.15 rate set by the federal government.
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That makes Rhode Island a very labor-friendly state. But if you listened to the arguments of some labor leaders, you would think we were lagging behind and giving working people a bad deal. They point to Connecticut and Massachusetts, which have higher minimum wages of $6.40 and $6.75 respectively. They say we need to keep up at the risk of forcing potential wage earners to go over the border to get their jobs.
In pointing to those particular states, those who support another hike In Rhode
Island’s minimum wage never mention New York, a state where the cost of living
is much higher but where the minimum wage is only $5.15. Apparently government
officials in that state are not losing sleep over losing hordes of workers to
their neighbors. Making policy arguments based on the decisions made in other
states is a dangerous game. After all, does every aspect of public policy in Rhode
Island have to mirror that of our neighboring states? There are certainly a number
of workplace regulations and labor laws, which are far more beneficial to workers
in Rhode Island than those adopted in Connecticut and Massachusetts. Would labor
groups in our state support an effort to water down those standards to bring us
in line with what goes on in our neighboring states?
The fact is labor organizations in Rhode Island, feeling flush with the success of several significant increases in the minimum wage are simply seeking to boost their track record further. Unfortunately, they fail to take into account the ability of many small businesses to pay. As a result, they imperil the very people they claim to represent, by creating a situation which will make it difficult to promote job creation in our state.
That is why I have proposed a common sense minimum wage bill that would tie future increases in the minimum wage to the Consumer Price Index, one of the leading indicators used by government to measure the strength of our economy. This legislation would allow for sustained long-term growth in the minimum wage as the economy grows, rather than having periods of wage stagnation followed by steep increases which are impossible for businesses to plan for.
As concerns about a possible economic downturn continue to grow, now is not the time to push through another major increase in the minimum wage. A minimum wage tied to the Consumer Price Index gives labor the benefit of slower, but steady growth in wages, while offering businesses a more stable and predictable way to anticipate increases in the minimum wage. It brings a much-needed level of fair play to the process and recognizes that on some issues, labor and business can both end up winners.
Leonidas P. Raptakis is the State Senator for District 20.
