Hartford Business Journal

20 Hartford Business Journal • February 11, 2019 • www.HartfordBusiness.com Opinion & Commentary OTHER VOICES $13 is magic number for CT's minimum wage By Greg Kraut A ny mechanic will tell you, don't put gas in the engine until the engine is fixed. Connecticut's economic engine is still broken, so why the rush to put "gas" in it, in the form of a $15 mini- mum wage, when it still needs fixing? I am all for a proper minimum wage that should be a peg of a local minimum to approximately 50 percent of the local median wage. But jumping to $15 per hour would constrict economic growth. In the 1960s and 70s, the minimum wage in the United States was at that 50 percent rate and then hit a low in 2013 at approximately 40 percent at $7.25. By increasing the minimum wage too quickly, and above the appro- priate metrics, it will do more harm to the people that need it most by way of less business opportunities as compa- nies will close up shop — or hold off on more hiring — at a greater pace. Connecticut is currently at an average of $10 per hour. The median wage in the Hartford metro area is roughly $22, so we should be at approximately $12. Contrast this to the federal minimum wage, which is too low at $7.25. Applying a methodol- ogy of the local median wage, the federal minimum wage is too low for over 80 percent of the nation's metro areas. Gov. Ned Lamont and leaders from both parties in Connecticut have pub- licly supported a $15 minimum wage. But based on what information? Are wages rising? Are businesses flocking to our state? The only positive thing I see about raising it to $15 immediately would be in higher payroll taxes. I would support increasing the minimum wage in annual steps from the current $10.10 to $13 per hour by 2022, starting with an immediate move to $12. I agree with the approach recently taken in New York City, which provides for a slower implementation of a $15 mini- mum wage for smaller companies, and we should consider potential reductions by age, full- or part-time status, a region of the state, and other factors. Greg Kraut runs a Westport-based think tank called The Economic Policy Project. EDITOR'S TAKE A peek into Lamont's economic-development playbook F or those interested in learning about Gov. Ned Lamont's economic-development vision, he offered a sneak peek Feb. 1, airing plans to restructure — to some degree — the Department of Economic and Community Development and appoint a Goldman Sachs executive to be the state's first unofficial commerce secretary. But his overall strategy and the details of it may have been hiding in plain sight for weeks, or longer. During the transition, then Gov.-elect Lamont tapped an 18-member committee to develop policies related to jobs and the economy. The group, which consisted of leaders from business, labor, workforce develop- ment and other sectors, actually finalized its recommendations in December, but they received little public airing — until now. The committee produced an 18-page document that lays out a bold vision for the state to de- velop an innovation-based eco- nomic-development plan that focuses on cultivating the next generation of entrepreneurs and growth-stage companies. It concludes that Connecticut must move away from a transactional approach to economic development (i.e. relying mainly on business incentivizes to stimulate job growth) toward a more transformational one, and it rests on three pillars: accountability in economic development, development of talent and the workforce, and encouraging an urban renaissance. If those don't sound like groundbreaking ideas, you're right. It's common knowledge that Connecticut needs vibrant cities and a talented and well-educated workforce to compete for 21st-century jobs. The real challenge is adopting policies that help get us there in a faster, more productive way and without having to spend hundreds of millions of dollars annually to bribe companies to stay or add jobs in the state, which was a hallmark of the Malloy administration. I agree that transactional economic development (i.e. corporate greenmail) is largely ineffective in pro- moting long-term growth, though Lamont has said he won't do away with business incentives entirely. Connecticut needs a grand vision for what role it wants to play in the 21-century world economy. Focusing on innovation and technology is a smart strategy, but how are we going to do it? Well, the transition team had a laundry list of ideas that may or may not become actual state policy. But so far, Lamont appears to be taking their work seriously. One of their first recommendations: Appoint "a secretary-level position (Secretary of Commerce) that is empowered to oversee all economic development." Check that off the list. Dave Lehman, a partner with investment bank giant Goldman Sachs, has been named to the dual role of DECD commissioner and se- nior economic advisor, essentially serving as the state's commerce secretary, Lamont said. Another call to action: Establish a public-private partnership to run state government's economic- development duties. Add another checkmark to the list. Lamont announced that the nonprofit Connecticut Economic Resource Center Inc. (CERC) and DECD will form a public-private partnership known as the Partnership to Advance the Connecticut of Tomorrow. CERC — whose co-chairs will include well-known business leaders Jim Smith, former CEO of Webster Bank, and Indra Nooyi, former PepsiCo Chairman and CEO — will function as the outward- facing recruitment arm on behalf of the state, and DECD will continue to support existing businesses while help- ing new businesses navigate state and local government. Lamont even held his press conference announc- ing the changes at downtown Hartford's co-working and startup incubator site Upward Hartford, giving a nod to his focus on innovation and cities. Rather than analyze other recommendations in the report, here are a few ideas I think are interesting. You can read the full report on Lamont's official state website (https://portal.ct.gov/governor). • Coordinate an interagency "Grow CT Team" (i.e. Housing, Transportation, Education, Environ- ment, and Planning) to work on economic-devel- opment initiatives when there is overlap. • Create the position of Chief Marketing/Communi- cations Officer under the new commerce secretary to elevate the importance of the Connecticut brand. • Develop a regional-planning partnership with Northeast states to promote collaboration on transportation (high-speed rail, freight, tolling); high-tech infrastructure (5G); international trade; regional marketing/promotion; and workforce training/education. • Expand the Eastern CT Manufacturing Pipeline Ini- tiative, which is a nationally recognized workforce- development program anchored by Electric Boat, to other parts of the state and other companies. • Create and seed with $100 million Capital Region Development Authority-like agencies for other major cities beyond Hartford. • Advance regional talks for high-speed rail to New York City and Boston. • Utilize colleges, the business community and en- trepreneurs to develop in three to four metro areas campuses of expertise around technical skills. • Provide all K-12 students with access to computer science. Greg Bordonaro Editor Greg Kraut

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