Hartford Business Journal

20 Hartford Business Journal • May 2, 2016 www.HartfordBusiness.com OPINION & COMMENTARY EDITORIAL Employers part of solution in closing income gap T oo often these days we read negative headlines about employers allegedly not doing right by their workers. Whether it's the national debate over a $15 minimum wage or attempts in Connecticut to fine companies that pay low wages or establish a public retirement sav- ings plan, employee pay and benefits — or lack thereof — are constantly coming under scrutiny, particularly in a politically charged election year. It's important, however, to bring some balance to the debate and highlight ways employers are not only investing in their workers, but setting them up for future success. Last week, the Lumina Foundation released a study — conducted by Accenture — detail- ing the effectiveness of Bloomfield insurer Cigna's education-reimbursement program, which provided more than 2,200 workers up to $8,000 annually between 2012 and 2014 to pursue a bachelor's or master's degree. The program has had a major impact on participants. Entry-level and mid-manage- ment employees who pursued higher-level degrees leveraging Cigna's financial support, for example, saw their wages grow 43 percent higher than workers who didn't participate. Additionally, Cigna employees who took advantage of the program were 10 percent more likely to be promoted and 8 percent more likely to stay with the company. Surveyed Cigna employees also said the program improved their career oppor- tunities and outcomes. Cigna benefited as well: Its program funding yielded a 129 percent return on investment, meaning, as the study explains it, the insurer got back every dollar it invested and avoided an additional $1.29 in talent-management costs. Cigna is one of many Connecticut employers that offer education-reimbursement and other perks, and they should be commended for it. While we realize such programs aren't fully altruistic, their mutual benefits help the company and employees. They also help the state's economy, by growing our bench of highly educated work- ers, a key advantage in the burgeoning knowledge economy. In fact, in response to the study's findings, Cigna actually raised its financial support to employees pursuing undergraduate and graduate degrees (to $10,000 and $12,000 respectively) in key areas crucial to its business, including cybersecurity and data analytics — positions other Connecticut companies have reported facing shortages in. The study's findings also provide lessons for businesses, mainly that it pays to invest in your workers. The right training and education programs can not only sharpen and raise employee skill levels, it can create a major selling point in talent recruitment and retention. Policymakers should also take something away, mainly that most employers do more good than harm in raising the financial and economic prospects of their workers. Too often, the private sector is blamed for widening this country's income gap, and politicians point to executive's multi-million-dollar pay packages as excessive and the root of inequality, when the story is much more complex than that. Globalization, technology advances and a slow recovery from the Great Recession are much greater forces restraining lower- and middle-class wealth gains. While we understand income inequality is a problem that deserves serious policy considerations, the private sector is more ally than foe in raising the economic pros- pects of American workers. n RULE OF LAW Bloomfield bottling plant opposition misguided By John Horak T he April 7, 2014, edition of the Hartford Business Journal included a column ("Connecticut's Struggle with Profits") in which I noted that there is underlying "cultural antipathy in the state to the very concept of 'profit' and, of course, to the business and commercial enter- prises from which it emerges." While GE's departure is the most salient example, two seemingly unrelated local events reveal the depth of this anti- business prejudice and its victims. The first event was the March 26 Hartford Yard Goats jobs fair, at which 1,400 people applied for 300 minimum- wage seasonal jobs. The second involves ongo- ing attempts by a grassroots group and state legislators to put the kibosh on a water bottling plant to be built in Bloomfield. A March 26 Internet video on the Hart- ford Courant website showed a Yard Goats job applicant, who says (I paraphrase) that he "really needs the job so he came out to see what was offered and that the jobs are great … grounds keeping, ticket sales and a lot of posi- tions open." Some simple arithmetic indicates that 1,100 of the 1,400 applicants will not get a Yard Goats job. There is no association repre- senting the interests of these 1,100 people and I am writing this column to support their cause. In Bloomfield the conundrum is this: Niaga- ra, a California-based purveyor of bottled water is set to build a 440,000-square-foot plant in which it would produce plastic bottles of water for sale. The water will be purchased from the Metropolitan District Commission (MDC), which has a sufficient supply to do the deal. Niagara would use its money to build the plant. There are some tax incentives being offered that, for better or worse, are com- monly used these days as an economic devel- opment tool. The plant would hire 38 people at the start and up to 125 when production is ramped up. The jobs would pay about $36,000 per year — just under $16 per hour — which is higher than the Yard Goat's positions and above the $15 minimum (living) wage that has garnered national support. I am sure that many of the 1,100 people not hired by the Yard Goats will line up around the block (as they did in Hartford on March 26) to fill out applications for jobs at the bot- tling plant if it gets built. As they contemplate this new job opportunity, I hope that someone makes them aware of the ferocious grassroots opposition to the plant — which has coalesced into an organization called "Save our Water," and which is supported by residents, local col- lege students and State Sen. Beth Bye (D-West Hartford). They are supporting Senate Bill 422, which will use regulation of water as a means to stymie economic growth of this type. I have poured over the Save Our Water mus- ings on the web in search of the rationale for putting its interests above those of the Yard Goats "Eleven Hundred," and as near as I can tell, it is based on the former group's aversion to plastics and profits and its affection for water. The plastics issue is the bottles (which, according to opponents, are produced daily in amounts sufficient to stretch from New York to San Francisco). This seems like a gross exaggeration to me; but even if they would stretch only to Topeka, water is a fluid (like beer, wine, milk, soda and juice) neces- sary to our survival and it needs a container of some sort in which to be brought to market. Moreover, I typically reuse the plastic bottles by filling them with tap water for con- sumption around the house, and the others end up in the recycling bin (becoming raw material to support the jobs of recyclers). The profits issue is, well, the notion, as calculated by Sen. Bye (who sponsored the legislation to kill the plant), that profits will be 50 cents per bottle giving the plant capac- ity to create $2 billion in profits each year. But wait, even if she is right (industry members claim her math is preposterous), are we talk- ing gross profit or net profit? Pre-tax or post- tax (Connecticut needs tax revenue and the higher the profit the greater the tax)? Profit of any type is also a function of raw materials costs, so the MDC will have some say in the profit margins when setting the price at which it sells the water. What about the profits to be made by the businesses in Bloomfield at which the plant's employees will be spending their earnings each year? Finally, there is the water. We drink water daily and it goes without saying that it is also recycled — first through our bodies then through treatment plants before flowing back to the earth where it serves as a habitat for fish and other aquatic life. I love the environment and spend as many hours as possible each year boating and fishing on the Connecticut River. However, any way I look at this issue the case advanced by Sen. Bye and other opponents simply does not hold water when compared to the case of the 1,100 folks who were not hired by the Yard Goats — some of whom might consider attending the next meeting of Save Our Water to see if they can be convinced otherwise. n John M. Horak has practiced law at Reid and Riege P.C. in Hartford since 1980. His opinions are his own. HARTFORDBUSINESS.COM POLL Does your company offer an educa- tion-reimbursement program? ● Yes ● No To vote, go online to HartfordBusiness.com. Last week's poll results: Should cash-strapped Hartford merge with East and West Hartford? 47.1% Yes 52.9% No John Horak Send Us Your Letters The Hartford Business Journal welcomes letters to the editor and guest commentaries for our opinion pages. Electronic submissions are preferred and welcome at: editor@HartfordBusiness.com. ▶ ▶ While we understand income inequality is a growing problem that deserves serious policy considerations, the private sector is more ally than foe in raising the economic prospects of American workers.

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