Hartford Business Journal

14 Hartford Business Journal • March 18, 2019 • www.HartfordBusiness.com Opinion & Commentary OTHER VOICES CT biz will adjust to $15 min. wage; state will be stronger for it By David Cooper A s Connecticut lawmakers consider raising the state minimum wage to $15 an hour, some businesses may be thinking, "How could we possibly make that work?" It's an understandable reaction for any individual firm. Success is hard, particularly for small businesses that often operate on thin margins with little cushion. But no individual firm is operating in a vacuum, and it's important to review what we know about the minimum wage's impact on the broader economy. The U.S. has had minimum wages for over 80 years and, after decades of research, the evidence shows that when higher standards are set for how all businesses must operate, in- dividual owners have less to fear than they may think. Gradually raising the Con- necticut mini- mum wage to $15 may require adjustments, but it would ultimately put the state economy on surer footing, strengthening a consumer base on which more busi- nesses can grow. Low-wage workers are customers too. In fact, most workers who would get a raise from a $15 minimum wage come from low-income households that tend to quickly spend every dollar they receive just to make ends meet. That means every extra dollar go- ing into affected workers' paychecks typically goes right back into the local economy in the form of more groceries purchased, a night out for pizza, or a down payment on a car. And for every employee at the locally owned shop getting a raise, there's likely 10 at the national chain whose paychecks will now include dollars that would other- wise have gone to corporate bank ac- counts in Little Rock or on Wall Street. With a higher minimum wage, busi- nesses would not only likely see more customers coming in the door, they'd also see fewer employees heading out of it. Higher minimum wages reduce turnover, lowering costs associated with recruiting, hiring and training new staff. As workers stay on the job longer, they develop better skills and provide better customer service. Higher wages are associated with lower absenteeism and higher pro- ductivity. An employee working two jobs might now need only one, and she can focus on doing that job well. It's for these reasons — and the fact that low-wage labor is only one portion of total operating costs — that busi- nesses can typically absorb minimum- wage hikes with relatively small price increases. Studies have found that in industries with large shares of affected workers, minimum-wage hikes typi- cally raise prices by less than 1 percent for every 10 percent change in the minimum wage. And, in most cases, when a business does face higher labor costs from a higher minimum wage, so do all its competitors. Thus, if a firm needs to adjust its pricing, it can typi- cally do so without facing any competi- tive disadvantage. Some businesses may need to adjust how they operate — yet, contrary to opponents' warnings of economic ruin and massive job losses, states and cities throughout the U.S. have raised their minimum wages hundreds of times and the sky has never fallen. Rather, the bulk of research over the past two de- cades has found that minimum-wage hikes have lifted pay with little impact on employment. In fact, as economists have looked beyond the narrow question of employ- ment impacts, they have found that the benefits of higher minimum wages far outweigh any potential costs. Research shows that raising the minimum wage lifts family incomes, reduces poverty, and spurs faster income growth. High- er minimum wages are associated with better public health outcomes, less need for taxpayer-funded public assistance, and even lower rates of recidivism. With New York and Massachusetts already on their way to $15, Connecti- cut businesses may find themselves increasingly struggling to attract and retain staff. The Economic Policy Institute estimates that hundreds of thousands of Connecticut workers would receive over $1 billion in added pay if the minimum is raised. Both sides may soon be wondering, "Why are we waiting?" David Cooper is a senior analyst at the Economic Policy Institute, a progressive think tank in Washington, D.C. David Cooper OTHER VOICES Hartford region can be a leader in Industry 4.0 By David Griggs T imes have changed with the advanced- manufacturing industry, creating a wealth of opportunity for Hartford and other areas of Connecticut. Connecticut — and specifically Hart- ford — has a rich history and tradition of success in many industries including precision manufacturing, aeronautical and aerospace, and industrial tools. Our state is home to some of the world's most innovative and prosperous advanced-manufacturing companies including Pratt & Whitney, Barnes Aero- space, Stanley Black & Decker, General Dynamics Electric Boat, Kaman Corp., and Pitney Bowes. But the term "advanced manufacturing" no longer reflects the growth and tech- nological advances in this sector, nor does it encapsulate the role Industry 4.0 plays in the economic growth and sustainability of our city, region and state. As the industry advances, so does the way we must talk about it and the functions it serves in our economic growth. Industry 4.0 is the fourth revolu- tion in manufac- turing. It describes the ongoing direc- tion of automation and data exchange in manufacturing technologies. By capitalizing on emerging tech- nologies, Indus- try 4.0 creates numerous ways to combine physi- cal and digital applications. This new industrial revolution can po- tentially enhance business efficiency with smart and au- tonomous systems powered by data and machine learning. The Hartford region can and should be a leader in Industry 4.0 with its legacy in manufacturing and existing leadership in this growing sector. As an integral community stakeholder, the Alliance and our partners play an important role stimulating inter- est around Industry 4.0 and its role enhancing our global brand. With our mission to serve as an economic-development leader and our well-connected audience of community stakeholders, the Alliance is well-posi- tioned to communicate the intent for Hartford to be a leader in Industry 4.0. Already, opportunities to encourage Industry 4.0 are taking place in Greater Hartford, with initiatives like The Stanley+Tech Stars Additive Manufac- turing Accelerator, which takes place at Manufactory 4.0, Stanley's new ad- vanced-manufacturing center in down- town Hartford. MakerspaceCT will also play an important role for those looking to become involved with Industry 4.0 as a hobby or a potential business. The Hartford-based workspace provides information and access to tools and technology for local inventors, innova- tors, manufacturers, entrepreneurs, hobbyists and students. Greater Hart- ford has all the as- sets in place to be one of the world's most economically viable manufac- turing markets. The resources and leadership we have to support Indus- try 4.0 will not only foster success but sustain it for generations. The Alliance looks forward to working with our community and prospective busi- nesses to ensure long-term eco- nomic growth in an industry whose past success here has built our founda- tion for the future. David Griggs is the president and CEO of the MetroHartford Alliance. Industry 4.0 is the fourth revolution in manufacturing. It describes the ongoing direction of automation and data exchange in manufacturing technologies. … The Hartford region can and should be a leader in Industry 4.0 with its legacy in manufacturing and existing leadership in this growing sector. David Griggs

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