Even 50-Cent Hike Could Cost Over $150K, Owner Says
By Rick Green
March 20, 2012
If it's our government policy to help teenagers and college kids earn more on summer vacation and at after-school jobs, then raising the minimum wage to $9.25 per hour might be a good idea.
Half of all minimum wage earners, according to federal statistics, are 25 or under, so this would directly benefit young people.
Of course, that's if there are jobs available for them.
Because while it might be fashionable to say raising the minimum wage helps the working folks, it also hammers the just-barely-making-it businesses that hire them. That's a strange message for Connecticut to be sending, just as the state is showing signs of emerging from a long economic nap and looking for small businesses to fuel a recovery.
"It would hurt us bad. I'm competing against New York and Massachusetts, where the minimum wage is a lot less,'' said George Frantzis, whose family has owned the 104-year-old Quassy Amusement Park in Middlebury for 80 years.
Quassy is to amusement parks what your neighborhood hardware store is to Walmart or Home Depot: small, quirky and locally owned. Located on Lake Quassapaug, It's affordable and retro, the kind of place that's not really so different from when my mother went there as a kid in the 1930s. It's precisely the sort of Connecticut institution legislators should be worried about preserving — instead of driving closer to the brink with a new law that scores points for politicians but does little to help the state.
The General Assembly is considering a plan to raise the minimum wage 50 cents in 2013 and another 50 cents a year later, boosting the hourly mandate to $9.25 by 2014. Future growth after that would automatically be tied to increases in the consumer price index.
Connecticut already has the fourth-highest minimum wage in the country, at $8.25 per hour. Significantly, this is higher than all three of our neighboring states.
Frantzis said each 50-cent increase in the minimum wage, which he pays to many of his more than 300 seasonal employees, would cost Quassy at least $150,000. For him, higher wages also mean fewer employees.
"Those are egregious amounts," Frantzis said. "This is something that you can't keep on passing on to the consumer. We are all vying for the discretionary dollar."
What would they do in 2013, if this bill passed and Gov. Dannel P. Malloy signs it into law? At Quassy, Frantzis told me, they could cut back on recently approved plans to expand a water park. There would be fewer raises for returning employees.
According to federal statistics, Connecticut has among the lowest percentages of low-wage workers of any state. But boosting the minimum wage would once again let the world know that state leaders really aren't too concerned about its reputation as a costly state to run a business. Last year, we became the first state to mandate paid sick leave.
"There are only so many times you can say Connecticut is open for business,'' said Malloy strategist Roy Occhiogrosso, whose boss is faced with the challenge of convincing companies to move here. The governor "is not sure that raising the minimum wage is the right way to go. He is definitely concerned that increasing the minimum wage would send the wrong message."
Wrong message it is. We already have a higher minimum wage than nearly any other state, sending an important message that we're not Alabama, Mississippi, Louisiana, South Carolina or Tennessee — states that don't even bother with a minimum wage law. Significantly, we also have an earned income tax credit, a good idea that actually helps working families.
"Ninety percent of my kids aren't supporting a family. This is a summer job to earn a little more money before going back to school,'' Frantzis says. Government "doesn't really have a sense of what drives an economy and business. They are not thinking of the small businessman who truly drives the economy."
At Quassy this year, admission will be $23.50 per person. That's far less than what you'd pay at Six Flags New England or even Lake Compounce, but this is a small park, albeit with a big roller coaster.
"We have grown and lasted 104 years being the park that is affordable,'' Frantzis said. "We understand the young family and their needs. We try to keep that mentality."
The General Assembly and Gov. Malloy ought to do the same.
Reprinted with permission of the Hartford Courant.
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