The state Senate has approved a bill to raise the state’s $6.75 minimum wage to $7.10 per hour as of next Jan. 1 and $7.40 on Jan. 1, 2007, making it likely that Gov. Donald L. Carcieri will have the plan on his desk within days.
Rhode Island already has one of the highest minimum wages in the nation, though so do Massachusetts and Connecticut, at $6.75 and $7.10, respectively, and Connecticut is raising its minimum to $7.65 by 2007. Bay State legislators are considering a two-year hike to $8.25.
The Rhode Island plan started out more ambitiously, with a jump to $7.25 next year and cost-of-living adjustments for the future, as Oregon and Washington have adopted. But business opposition tempered the plan to its current form.
State Rep. Charlene M. Lima (D-Cranston), the bill’s sponsor, said the compromise lets businesses adapt more slowly to the change while helping Rhode Island’s workers.
“Anyone who is at the bottom of the pay scale is having a very, very difficult time getting by,” Lima said, “because the cost of living in this area has been increasing much more rapidly than the wages people are taking home.”
Just in the last year, the average cost of living in the Northeast has risen by 3.5 percent, according to the U.S. Department of Labor. To meet the federal poverty line for a family of three, $16,090 this year, working 40 hours a week, year-round, you’d need to make $7.74 per hour.
Just in the last year, the average cost of living in the Northeast has risen by 3.5 percent, according to the U.S. Department of Labor. To meet the federal poverty line for a family of three, $16,090 this year, working 40 hours a week, year-round, you’d need $7.74 per hour.
A PBN Executive Poll query on the issue in May found 69 percent of the respondents favored the hike then on the table, to $7.75 by 2007. But major business groups such as the Greater Providence and Northern Rhode Island Chambers of Commerce, the Rhode Island Retail Federation, and the National Federation of Independent Business fought against the bill.
“We’re disappointed it passed,” said Terrance Martiesian, lobbyist for the NFIB. Rhode Island companies already have difficulties competing with rivals in lower-cost states, he said, and “you’re just putting more pressure on them.”
Minimum wage hikes also entail tax hikes and higher insurance costs, Martiesian said, and they drive up wages in general, because workers already making $7.10 an hour will want to earn more, so they’re not just at minimum wage. Ultimately, the result will be cutbacks in workers’ hours and in low-end jobs, he said, because “you only can pass so much of these costs on” to customers. The business groups haven’t given up yet, however; Martiesian said they plan to ask Carcieri to veto the legislation.
Carcieri let the state’s last minimum wage hike, effective Jan. 1, 2004, go through, but he’s “still reviewing” this one, his spokesman Jeff Neal said. Fellow Republican governors have taken different paths: California Gov. Arnold Schwartzenegger vetoed a hike last year, but Connecticut Gov. Jodi Rell supported her state’s latest increase.
Because Lima’s bill was amended in the Senate, it must return to the House of Representatives for passage in concurrence before it can be sent to the governor.
