Fair Pay for Women and People of Color in Connecticut Requires Increasing the Minimum Wage

February 08, 2013

Tens of thousands of workers in Connecticut – mostly women and people of color – struggle to make ends meet on minimum wage earnings.  A bill pending in the Connecticut Senate (S.B. 387) would raise the minimum wage from $8.25 per hour to $9.00 per hour in 2013 and to $9.75 per hour in 2014, then index it to inflation beginning in 2015.  Increasing the minimum wage is a key step toward fair pay for women and people of color in Connecticut.

Women and people of color are more likely to be paid the minimum wage.   

  • Women made up nearly six in ten Connecticut workers who were paid Connecticut’s minimum wage or less in 2011.[1]  They provided care for children and elders, cleaned homes and offices, and waited tables. 
  • Women of color are disproportionately represented among female minimum wage workers.[2]  Nationally, black and Hispanic women were each just over 12 percent of all employed women in 2011;[3] among women who made the federal minimum wage, nearly 15 percent were black and more than 16 percent were Hispanic.[4]
  • Overall, people of color are disproportionately represented among minimum wage workers.  Nationally, black and Hispanic workers were about 11 percent and 14 percent of all workers in 2011, respectively;[5] among workers who made the federal minimum wage, just over 15 percent were black and nearly 19 percent were Hispanic.[6]

It’s time to give low-wage workers in Connecticut a raise. 

  • A woman working full time, year round in Connecticut at the current minimum wage of $8.25 per hour will earn just $16,500 annually.[7]  That’s more than $1,600 below the federal poverty line for a mother with two children.[8]  If the federal minimum wage (currently $7.25 per hour) had kept pace with inflation, it would be over $10.50 per hour today, setting a floor for states more than $2.25 above Connecticut’s current minimum wage.[9]  
  • Connecticut families are struggling in this tough economy.  In 2011, 28 percent of black families with children were in poverty,[10] 32 percent of Hispanic families with children were in poverty,[11] and 33 percent of single-mother families were in poverty.[12]

Raising the minimum wage and the tipped minimum wage would boost wages for working women and people of color in Connecticut and help close the wage gap.

  • Increasing the minimum wage to $9.75 per hour would boost annual earnings to $19,500, an increase of $3,000 per year – enough to lift a family of three out of poverty.[13]  Indexing the wage to inflation would prevent its value from falling further relative to the cost of living.
  • The Economic Policy Institute (EPI) estimates that if Connecticut’s minimum wage were increased to $9.75 per hour by 2014, over 246,000 Connecticut workers would get a raise.[14] Almost 59 percent of the workers who would benefit are women, and more than 35 percent are people of color.[15]
  • Increasing the minimum wage would mean higher pay for thousands of Connecticut women and help close the wage gap.[16]  In 2011, Connecticut women working full time, year round were paid only 78 cents for every dollar paid to their male counterparts.[17] Black women working full time, year round made only 58 cents, and Hispanic women only 48 cents, for every dollar paid to white, non-Hispanic male counterparts.[18]

Raising the minimum wage would strengthen Connecticut’s economy.

  • Increasing the wages paid to low-wage workers results in lower turnover, boosts worker efforts, and encourages employers to invest in their workers.[19]
  • Raising the minimum wage does not cause job loss, even during periods of recession.[20] 
  • Most minimum wage workers need this income to make ends meet and spend it quickly, boosting the economy.  Research indicates that for every $1 added to the minimum wage, low-wage worker households spent an additional $2,800 the following year. [21]
  • EPI estimates that raising Connecticut’s minimum hourly wage to $9.75 by 2014 would generate about $148 million in additional economic activity and nearly 1,300 jobs.[22]  

 



[1] NWLC calculations based on unpublished U.S. Dep’t of Labor, Bureau of Labor Statistics data.  Figures are annual averages for 2011. Available data do not permit a precise calculation of the percentage of women making the state minimum wage in Connecticut ($8.25 per hour).  However, women were 59 percent of workers making $7.99 per hour or less and 56 percent of workers making $8.99 per hour or less in Connecticut in 2011.   

[2] The term “minimum wage workers” refers to workers making the federal minimum wage or less.

[3] NWLC calculations from U.S. Dep’t of Labor, Bureau of Labor Statistics, Current Population Survey. Figure for black women from Table 3, http://www.bls.gov/cps/cpsaat03.htm (last visited Apr. 6, 2012). Figure for Hispanic women from Table 4, http://www.bls.gov/cps/cpsaat04.htm (last visited Apr. 6, 2012). 

[4] NWLC calculations based on U.S. Dep’t of Labor, Bureau of Labor Statistics, Characteristics of Minimum Wage Workers, 2011, http://www.bls.gov/cps/minwage2011tbls.htm (Table 1). 

[5] NWLC calculations, supra note 3.

[6] NWLC calculations, supra note 4.

[7] NWLC calculation assuming 40 hours per week, 50 weeks per year at $8.25 per hour. 

[8] U.S. Census Bureau, Current Population Survey, 2012 Annual Social and Economic Supplement, Table POV35, http://www.census.gov/hhes/www/cpstables/032012/pov/toc.htm (last visited Feb. 5, 2013).

[9] At $8.25 per hour, Connecticut’s minimum wage is higher than the federal minimum wage.  The high-water mark for the federal minimum wage of $1.60 in 1968 (see Douglas Hall, EPI, Increasing the Minimum Wage Is Smart for Families and the Economy (May 2011), available at http://www.epi.org/publication/increasing_the_minimum_wage_is_smart_for_families_and_the_economy/) would be $10.56 in 2012 according to the U.S. Dep’t of Labor, Bureau of Labor Statistics inflation calculator, http://www.bls.gov/data/inflation_calculator.htm (last visited Feb. 5, 2013).

[10] NWLC calculations from U.S. Census Bureau, 2011 American Community Survey, http://www.census.gov/acs/www/ (Table B17010B). Figures are for households where the householder’s race is black alone. 

[11] Ibid (Table B17010I). Figures are for households where the householder’s ethnicity is Hispanic or Latino. 

[12] Ibid (Table S1702).

[13] NWLC calculation assuming 40 hours per week, 50 weeks per year at $9.75 per hour for the minimum wage. 

[14] Unpublished EPI estimates. EPI estimates that 154,000 workers making less than $9.75 per hour would directly benefit from a wage increase, and 92,000 workers making slightly more would also see their pay rise due to the higher floor set by the new minimum wage.

[15] Ibid.

[16] Under most circumstances a higher minimum wage would narrow the wage distribution, effectively narrowing the wage gap.  Nicole M. Fortin & Thomas Lemieux, Institutional Changes and Rising Inequality, Journal of Economic Perspectives, Spring 1997, 75-96, at 78, available at http://www.econ.ucdavis.edu/faculty/mepage/econ151b/Fortin%20and%20Lemieux.pdf.  See also Francine D. Blau & Lawrence M. Kahn, Swimming Upstream, Journal of Labor Economics,  Jan. 1997, 1-42, at 28, available at http://aysps.gsu.edu/isp/files/ISP_SUMMER_SCHOOL_2008_CURRIE_Swimming_Upstream.pdf

[17] NWLC calculations from U.S. Census Bureau, 2011 American Community Survey, http://www.census.gov/acs/www/ (Tables R2001 and R2002).

[18] NWLC calculations from U.S. Census Bureau, 2009-2011 American Community Survey Three-Year Estimates, http://www.census.gov/acs/www/ (Tables B20017B, B20017H, B20017I).

[19] T. William Lester, David Madland & Nick Bunker, Ctr. for Amer. Progress, An Increased Minimum Wage is Good Policy Even During Hard Times (June 2011), available at http://www.americanprogressaction.org/issues/2011/06/higher_minimum_wage.html.

[20] Mary Gable & Douglas Hall, EPI, The Benefits of Raising Illinois’ Minimum Wage, at 2-3 (Jan. 2012), available at http://www.epi.org/files/2012/ib321.pdf.

[21] Daniel Aaronson, Sumit Agarwal & Eric French, Fed. Reserve Bank of Chicago, The Spending and Debt Responses to Minimum Wage Increases, at 10 (Revised Feb. 2011), available at http://www.chicagofed.org/digital_assets/publications/working_papers/2007/wp2007_23.pdf.

[22] Unpublished EPI estimates.

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