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  • 19 Jun 2014 3:28 PM | Anonymous

    Go head to head with some of the best Chefs in New York and New Jersey for your chance to win $500 at the 2014 Tri-State Food Expo!  Click here for the rules and details of the competition. 

  • 19 Jun 2014 3:25 PM | Anonymous

    If you think you can stand the heat, sign up today to compete on The Taste!  Open casting calls for chefs interested in competing in this culinary competition series will be held in Boston on Saturday, July 12th.  Click here to compete for your chance to win $100,000!! 

  • 19 Jun 2014 11:06 AM | Anonymous

    The 2014 Legislative session might have been a short session, but there was no shortage of bills impacting the hospitality industry.  The CRA followed over 60 bills during this three-month session, many of which did not become law, but we expect will be proposed again next year during the longer 2015 session.

    The major piece of legislation which will impact restaurants is an increase in the minimum and tipped wages.  Connecticut's minimum and tipped wages will increase in increments in each of the next three years until 2017, when the minimum wage will increase to $10.10 per hour. 

    On the positive front, there were changes made to the paid sick leave law in an attempt to make it more workable in determining who must comply. 

    There were also several bills which did not pass that would have adversely impacted restaurants, including: a per employee tax for all franchises with 500 or more employees in CT, a mandatory cash-back rule on gift cards with a minimum balance left after purchase, and a bill that would have banned the common practice of servers being charged for their portion of the credit card processing fee. 

    Please see below to read a full 2014 legislative wrap-up.  If you have any questions about legislative matters, or would like to be involved in the CRA's Legislative Committee, please contact Nicole Griffin at or (860) 278-8008 ext. 106.

    The Connecticut General Assembly convened, as scheduled, on February 5, 2014 and adjourned on May 7, 2014. Levin, Powers & Brennan tracked 64 bills on behalf of the CRA during this “short” legislative session.

    Of most significance to the Connecticut Restaurant Association were the following bills:










    Under current law, the state's minimum hourly wage is scheduled to increase from $8.70 to $9.00 on January 1, 2015. Governor Malloy proposed Senate Bill 32 and with the help of President Obama, this bill passed both the House and Senate in March.  The CRA vehemently opposed this proposal.

    This bill increases the minimum wage by $0.45 to $9.15 on that date, by an additional $0.45 to $9.60 on January 1, 2016, and by an additional $0.50 to$10.10 on January 1, 2017.  The bill does not change the “tip credit” allowed by law. Thus, it will automatically increase the employer's share of minimum wages for wait staff.  The table below reflects the increases            2014                          2015                                2016                          2017

    Minimum Wage





    Server Wage


    Tip credit 34.6%




    Tip credit 36.8%




    Tip credit 36.8%




    Tip credit 36.8%



    Bartender Wage


    Tip credit 15.6%




    Tip credit 18.5%




    Tip credit 18.5%




    Tip credit 18.5%




    Senate Bill 249 would have created a state-run, public retirement plan for private-sector employees employed by a company with 5 or more employees that does not currently offer a retirement plan.  This bill was championed by the House and Senate Majority Leaders.  The CRA was part of a large coalition of business and insurance companies and trade associations opposing SB 249, which a watered down version eventually became part of a final budget deal.

    The bill creates the Connecticut Retirement Security Board and requires it to (1) conduct a market feasibility study on implementing a public retirement plan and (2) develop a comprehensive proposal for implementing the plan that must include certain goals and design features. The board must submit: two reports on the feasibility study's status to the governor and Labor Committee, by May 1, 2015 and January 1, 2016, respectively and the comprehensive proposal to the governor, General Assembly, Senate president pro tempore and House speaker by April 1, 2016.


    The original version of this bill would have decreased the minimum wage “tip credit” for wait staff from 36.8% to 33% on January 1, 2016, and to 30% on January 1, 2017.  In effect, the bill requires hotels and restaurants to pay their service employees at least 67% of the minimum wage in 2016 ($6.43) and 70% of the minimum wage in 2017 ($7.07). It also would have prohibited employers of any tipped employees from applying the tip credit if they reduce or impose a surcharge on an employee's tips paid through a credit card transaction.

    In the final days of session, there was an effort to move only the latter section of the bill, which would have prohibited what is common practice in the restaurant industry of employers charging wait staff the tipped portion of the credit card processing fee.  The CRA worked to educate legislators that this issue has already been contemplated by the federal government which has decided that this practice is permissible.  The bill did not move forward but we do expect it to return during the 2015 session.


    The original version of this bill would have set default rates for workers' compensation-related services at hospitals and ASCs at 200% of the service's Medicare reimbursement rate.

    The compromise version changes how the default rates for workers' compensation-related services at hospitals and ambulatory surgical centers (ASC) are determined when an injured employee's employer or workers' compensation insurance carrier (the “payor”) does not negotiate rates with the hospital or ASC. Current law requires the payor to pay a hospital for its actual costs of treating an injured worker, as determined by a workers' compensation commissioner. In practice, the payor and hospital or ASC generally negotiate discounted rates for the hospital's or ASC's services. If they do not negotiate, the payor must pay the hospital's or ASC's billed rates.

    The bill instead requires the Workers' Compensation Commission chairman, by January 1, 2015, to establish and publish Medicare-based formulas for determining rates for workers' compensation-related services at hospitals and ASCs. The formulas must be for services covered by Medicare. In establishing them, the chairman must consult with employers and their insurance carriers, self-insured employers, hospitals, ambulatory surgical centers, third-party reimbursement organizations, and any other entities the chairman deems necessary. After initially publishing the formulas, the chairman must annually publish them on January 1.

    Starting 90 days after the chairman publishes the formulas, the bill caps the default rates at the reimbursements listed in the formulas. If the services are not covered by Medicare (and therefore do not have an applicable formula) the rates must be determined by the chairman, in consultation with the above consulting entities. The payor can also negotiate different rates with the hospital or ASC.


    The original version of this bill would have mandated that anyone renewing a liquor permit for on-premise alcohol consumption with the Department of Consumer Protection give simultaneous written notice of the application to the chief law enforcement official in the town where the business is located. 

    The compromise version allows municipalities to adopt ordinances requiring anyone applying to renew a liquor permit for on-premises alcohol consumption with DCP to simultaneously give written notice of the application to the chief law enforcement official the municipality where the business is located. The official or designee may send written comments on the application to the DCP commissioner within 15 days after receiving the notice. The commissioner must consider the comments before renewing the permit.


    This bill, back for the second time in a different version, would have assessed a quarterly fee on employers with 500 or more employees and franchisors whose franchisees collectively employ 500 or more employees. These employers and franchisors (“covered employers”) must pay a $1- per- work-hour fee for each person who was (1) on the employer's payroll, or the payroll of one of the franchisor's franchisees, for the last 90 days of the most recently completed calendar quarter and (2) paid wages by the employer or franchisee that were less than 130% of the state's minimum wage.

    The CRA, along with other businesses and trade associations, worked to defeat this bill in the Finance Committee.  The bill failed in the Finance Committee 16-27.  We expect it to be back again next year.


    This bill changes the method for determining if a nonmanufacturing business is exempt from providing paid sick leave. Under current law, it must provide the leave if it employs 50 or more people in Connecticut during any of the previous year's quarters. It must determine if it exceeds this threshold by January 1 annually based on the quarterly reports it submits to the labor commissioner. Under the bill, the business must determine if it meets the annual 50-employee threshold base on the number of employees on its payroll for the week containing October 1.

    The bill also prohibits the business from taking certain actions to avoid providing paid sick leave. Specifically, the business cannot fire, dismiss, or transfer an employee from one job site to another to come under the 50-employee threshold. Workers aggrieved by such practices may file a complaint with the labor commissioner, as the law allows.

    The bill changes the timeframe for accruing paid sick leave. Under current law, employees accrue one hour of sick leave for every 40 hours worked per calendar year. Under the bill, they accrue one hour of paid sick leave for every 40 hours worked during whatever 365-day year the business uses to calculate employee benefits. This allows the employer to start the benefit year on any date, rather than only on January 1.


    The original version of this bill would have required anyone accepting a gift card to provide a cash refund after a purchase when there is a balance and when the purchaser requests it.  A violation of this would have been deemed an unfair or deceptive trade practice.

    The bill was strongly opposed by the CRA and the CT Food Association and was eventually changed to require those restaurants and retailers accepting gift cards to provide a cash refund on gift cards with a balance of $5 or less.  Eventually, the House passed a version of the bill which lowered the cash refund to $1 or less remaining on a gift card and changed the penalty to a fine.  The CRA and CFA continued to oppose the bill and it was not called in the Senate.  We expect this bill to be proposed during the 2015 session.

    The following is a list of other monitored bills that also passed:


    This bill allows certain organizations seeking temporary or daily liquor permits to apply to DCP for a permit for multiple events, rather than applying each time they wish to hold an event and increases the number of times such organizations can apply each year to 12. The affected liquor licenses are the temporary beer, temporary alcoholic liquor, charitable organization, and nonprofit corporation permits.  This law is effective July 1, 2014.


    This bill expands the types of deposits that automatically exempt up to $1,000 from bank executions against a judgment debtor's account to include electronic direct deposits that are readily identifiable as wages. Current law requires this automatic exemption if, within 30 days before the execution order, the judgment debtor's account received electronic direct deposits that are readily identifiable as federal veteran's benefits, Social Security benefits, supplemental security income benefits, or child support payments under the Social Security Act. The bill extends the same exemption, including its notice requirements and limitations, to accounts that received electronic direct deposits readily identifiable as wages within 30 days before the execution order.

    The bill also requires an employer, its agent, or representative paying an employee's wages by direct deposit into any bank, Connecticut credit union, or federal credit union, to electronically identify the deposit as wages.  This law is effective October 1, 2014.


    This bill allows those holding manufacturer for a brew pub and manufacturer for beer and brew pub permits to also hold caterer liquor permits. Under current law these manufacturer permittees can serve alcohol only on their own premises. The bill allows them, if they obtain a caterer's permit, to sell and serve liquor, beer, spirits, and wine for on-premises consumption at any outside activity, event, or function for which they are hired. By law, they may only sell and serve alcohol during the allowable hours for on-premises alcohol sale.

    By law, caterer liquor permittees must notify DCP at least one business day before an event of the event's date, hours, and location. The notice must be given on a DCP-prescribed form, or, if the caterer is unable to do so due to exigent circumstances, by telephone. The annual caterer liquor permit fee is $440.  This law is effective July 1, 2014.

    It has been a pleasure to represent the Connecticut Restaurant Association at the state legislature and we look forward to our continued relationship in Hartford.

    If you have any questions or concerns on any of these matters please do not hesitate to ask.

    Thank you,

    Levin, Powers & Brennan, LL

  • 05 Jun 2014 10:02 AM | Anonymous
    Full Article:

    On Tuesday, June 10, the Ninety Nine Restaurant & Pub will be hosting a Mini Golf Tournament to kick-off their annual Jimmy Fund and Dana-Farber Cancer Institute Fundraiser to help raise money for cancer research, while also supporting Team Lanzoni, made-up of Ninety Nine Restaurant team members who will be participating in this year's Falmouth Road Race and the Pan Mass Challenge.

    In addition to the mini golf tournaments and two races, there will be various fundraising efforts throughout New England and New York, including in-restaurant check donations and in-restaurant events.

    The Mini Golf Tournament will consist of teams who will receive awards and prizes for the following: best team scores, most hole in ones, best themed & team 1st, 2nd & 3rd prizes, and the best or most creative team name.

    There will also be raffle tickets, prizes and giveaways, a free BBQ, Silent Auction, music and more.

    The public is invited to play. Please stop by your local Ninety Nine Restaurant to pick up a registration form. The tournament entry deadline is Friday, May 30.

  • 21 Apr 2014 4:16 PM | Anonymous
    Read Full Article:

    Mystic - Thirty-five-year-old Daniel Meiser quips that his brother has diagnosed him with "entrepreneurial ADD" and says he's not sure whether that's a compliment.

    The co-owner of Mystic's hugely successful Oyster Club, five-month-old Engine Room, and soon-to-open downtown butcher shop is already planning his next endeavor - an oyster farm to supply his two restaurants - and after that, down the road a bit -perhaps a small farm so he and his partners can raise their own pigs.

    Meiser was a rising star in Connecticut's restaurant world when he was recruited in 2010 to help open the food service at Watch Hill's acclaimed Ocean House. During his short stint there he met his future wife, abandoned plans to open a restaurant in the Virgin Islands and started scoping out local properties instead.

    He still remembers the day he eyed the "for sale" sign in downtown Mystic on the vacated Parisian Pomme Fries property at 13 Water St., and how as he jotted down the telephone number an employee on a cigarette break at the next-door Emporium shouted over, "You gonna buy that place?"

    "Yes, I'm going to open a restaurant," said Meiser.

    A graduate of the French Culinary Institute in Manhattan and Bucknell University, where he earned a bachelor of arts degree in political science and legal studies, Meiser partnered with his brother-in-law, Jason Steadman, recruited family and friends as investors, and went looking for the best executive chef he could find.

    Since Meiser was going to run the business, he knew he couldn't oversee the kitchen, too, so he hired James Wayman, for seven years executive chef at The River Tavern in Chester, and before that, a chef at Water Street Cafe in Stonington Borough.

    The first time Wayman and Meiser met, they went foraging for mushrooms on the Salem farm where Wayman was living, and then cooked them up. The day they sealed the deal to work together, they were bluefishing off Meiser's boat.

    The duo opened the Oyster Club on Sept. 28, 2011, after extensive renovations and expansions to the two-story, 1,200-square-foot Water Street property. They added a 500-square-foot dining room on one side and a 400-square-foot bar on the other, cutting into the granite ledge that runs around the building. Last summer, they opened the seasonal Treehouse out back - think "Swiss Family Robinson" - space for an additional 70 patrons in addition to the existing 85 seats in the dining room, bar and patio.

    The Treehouse has its own menu and kitchen, separate from Wayman's farm-to-table regime at the Oyster Club.

    Tricia Walsh, president of the Greater Mystic Chamber of Commerce, noted all the jobs Meiser and his partners have created (36 at the Oyster Club and 58 at the Engine Room and more when the outdoor spaces open up) and the visitors they are attracting.

    "They definitely have created a buzz," she said, and added, "and they bring in a whole new demographic."

    Seafood from Point Judith

    Born and raised on a farm near Greensboro, N.C., Wayman says he has spent a lifetime sourcing foods and eating with the seasons. It's a way of life for him, not a trend, he says.

    There are a handful of staples on the Oyster Club menu - the lobster roll, mussels, chowder and burger - but everything else changes daily. There's always a steak, a homemade pasta and vegan dish, but the preparation and sides change with the day and seasons.

    Fresh and local is Wayman's mantra.

    He buys from farmers, breeders and fishermen that he knows, most of whom are located within 30 miles of his restaurants.

    Yes, restaurants.

    Just 27 months after the Oyster Club opened, Meiser and Wayman partnered on the Engine Room, a 150-seat (30 of which are outdoors) eatery across the Mystic River at 14 Holmes St., which boasts American comfort food with a Southern flair.

    Meiser and Wayman are partners in this establishment, and also on the butcher shop that they plan to open later this year in the old Emporium building, which the Mystic Art Association has bought and is refurbishing, and from which the partners will lease the basement and first floor.

    The butcher shop will provide meat for the Oyster Club and Engine Room and be open to the public.

    As it is, already, there's usually a pig and a half, a quarter cow, and a whole goat in the walk-in refrigerator at Oyster Club. Wayman does the butchering and has a passion for charcuterie - cooking with prepared meat products such as sausage, ham, bacon terrines and pâtés.

    By butchering yourself, there's no waste, and Wayman's offal -a grounded blend of pork shoulder, liver, heart and kidneys slowly smoked with vegetables and wine to make a Bolognese - is a popular item on the Oyster Club menu.

    Buying locally sourced food ensures the quality of the product and helps the local economy, Meiser and Wayman said. At Oyster Club, 90 percent of the produce is organic.

    Much of the seafood comes from Point Judith, R.I., and the seasonal razor clams are harvested in Watch Hill on a moon tide by a woman who knows where to find them.

    Wayman said Meiser - who understands and loves food the same way he does -has given him the latitude he wants and needs.

    "It's a wonderful thing, his respect for me in the kitchen," said Wayman. "Dan has a great quality of letting people who have talent use it ... he really allows me to shine."

    Meiser is spending more time at the Engine Room these days, and Wayman at the Oyster Club. All the original Oyster Club investors have been paid off. Meiser's brother-in-law, Steadman, lives and works in London, and is simply a financial partner.

    'Theory of critical mass'

    Meiser and Wayman are focused on their butcher shop, and what they will do with the basement space in the Emporium. And they're seriously talking about establishing a boutique oyster farm to supply their restaurants, which will require an arduous process of applications and acquiring permits.

    And perhaps, with the butcher shop, they might establish a CSA (community supported agriculture) project, where members can get regular allotments of meats, fish, sauce and produce, and offer occasional cooking or butchering classes, where they could teach others about food preparation and the use of local products.

    Way down the line, maybe they would invest in a small farm, too, to raise some of the crops and meats they use, says Meiser.

    Both locals and out-of-towners are patronizing their restaurants, the two say, and noted their investments in Mystic add to the mix of other eateries and retail establishments.

    "I believe in the theory of critical mass," says Meiser. "The more great restaurants, food, bars, the better off we all will be."

    Groton Town Manager Mark Oefinger likens Meiser and Wayman to the Steamboat Wharf Co. team who first invested in downtown Mystic almost 40 years ago and continue to own and manage numerous properties today.

    "They are a tremendous success story," Oefinger says of Meiser and Wayman.

    For Meiser and Wayman, the focus is still on the food.

    "Our food has a story," says Meiser, explaining that when Wayman prepares a dish, he knows where the beef or seafood came from, how it was cultivated, raised and harvested, and precisely how it was prepared.

    Whatever they do in the future, the two say it will revolve around food.

  • 14 Apr 2014 10:19 AM | Anonymous
    The Importance of Music Licensing 

    The Hartford Business Journal recently ran an article about BMI and several Connecticut restaurants being sued for non-licensure.  You can’t play music publicly without a license.  Copyright laws require music users to get permission from songwriters and composers who can charge a fee before their music is played publicly, which then allows them to continue to create music.  CRA members are entitled to a 20% discount on licensing fees with BMI.  Have questions or are unsure if you are licensed?  Contact Justina Santiago at the CRA at or (860) 278-8008 ext. 115.
  • 31 Mar 2014 2:33 PM | Anonymous
    Full Article:

    A few years ago, nine songs were played inside Shelton's Vazzy's Cucina restaurant that ended up costing owners John Vazzano and Vincent L. Noce $18,000.

    That's because an agent of licensing giant Broadcast Music Inc., which represents the artists who owned the tracks, attested to being present when the tunes were played and sued Vazzano and Noce for copyright infringement, claiming the restaurant's music qualified as a public performance. Under federal copyright law, that meant the restaurant had to pay for the rights to play the songs, BMI said.

    Vazzano said he thinks a private party actually played the tunes. He also thought his Muzak and cable subscriptions protected him from copyright infringement, but that wasn't the case in this instance.

    Instead of going through a costly legal fight, the restaurateurs settled the suit, something Vazzano says he is still bitter about today.

    "How do you recoup that?" Vazzano asked. "You can't raise your prices."

    Restaurateurs know plenty about the cost of liquor licenses, staffing and ingredients, but a surprising number continue to be entangled by music licensing lawsuits.

    Three Connecticut restaurants, including Greater Hartford's Plan B Burger Bar, are currently involved in music copyright infringement suits, federal court records show. Since 2012, at least another eight eateries have settled suits with BMI, or had judges rule against them, court records show.

    BMI, which represents the families of artists like Johnny Cash and about 600,000 other clients, has nearly 9.5 million songs in its catalog and brought in $944 million in licensing revenue last year.

    The New York-based company has been suing restaurants in Connecticut and beyond since at least the 1980s, court records show. BMI also appears to be more litigious undefined at least in this state undefined than its rival, The American Society of Composers, Authors and Publishers (ASCAP).

    Besides the parent company of Plan B, BMI has active lawsuits against the owners of Cheshire's Waverly Inn and Willimantic's Lucky Frog. Also, a number of restaurants, court records show, have settled or reached judgments with BMI including: West Hartford's Barcelona Wine Bar; Eli's on the Hill in Branford; Guilford Mooring in Guilford; Lanza's Restaurant in Ansonia; Lumberyard Pub in West Redding; Ash Creek Saloon in Norwalk; and Cobb's Mill Inn in Weston.

    While Vazzano's $18,000 settlement is disclosed in court filings, almost all other BMI settlements with area restaurants appear to be confidential.

    The steady number of lawsuits over the past few years suggests that restaurants and bars either don't understand copyright rules, or underestimate the likelihood of getting contacted and/or sued by license owners.

    Some restaurateurs wonder if BMI's demands are legitimate when they first get a letter or phone call, said Nicole Griffin, executive director of the Connecticut Restaurant Association.

    "I think they wonder if it's legitimate because they don't necessarily understand they have to pay a licensing fee for music," Griffin said.

    The association, like its fellow entities in other states, has an agreement with BMI to offer its members licenses at a discount as high as 20 percent, Griffin said.

    But not every restaurant is an association member. And some business owners think there isn't much risk, she said.

    "There are probably some businesses who think 'eh, I don't have to do this,'" Griffin said.

    Costly lack of subscription

    BMI's recent lawsuits come at a time when music has never been more accessible, from online offerings like Spotify, Pandora and YouTube, to megabytes worth of songs stored on tiny iPods.

    But for restaurants and other businesses, the copyright laws regarding the public performance of music undefined live or recorded undefined were first established around the time of the phonograph in 1896.

    An explosion in music technology since then hasn't changed the rules or loosened restrictions.

    Spotify and Pandora both warn on their respective websites that business owners don't have permission to use their products for public performance.

    A bar or restaurant is even liable for musicians playing live tunes on their premises. If a band plays a cover song for which the bar has no license, the bar is legally liable, according to BMI and ASCAP.

    There are exceptions for radios and televisions playing in restaurants and bars, but even those are convoluted. The exception only applies to establishments under 3,750 square feet. Larger venues must seek licenses, but only if they have more than four loudspeakers in any single room, or if they charge patrons a cover.

    A restaurant owner risks paying penalties even if they play music through an iPod connected to a speaker, BMI and ASCAP say.

    After Vazzy's Cucina settled its suit, Vazzano said he decided to play it safe and buy a BMI license for his Shelton location. It costs him about $4,500 a year, he estimated, and allows him to play any song in BMI's vast catalog.

    He said BMI has been trying to get him to buy licenses for his four other locations undefined in Bridgeport, Fairfield, Monroe and Stratford undefined but he has refused because he said he doesn't play BMI music there.

    The companies that operate five Plan B burger restaurants in Connecticut undefined LGF LLC and Local 8 LLC undefined were sued by BMI last July for playing at their Glastonbury location seven unlicensed songs, including Queen's "We Are the Champions" and Lynyrd Skynyrd's "Gimme Three Steps."

    Hartford attorney John Kennelly, who represents Plan B, said the restaurants had a license from The American Society of Composers, Authors and Artists, but not BMI.

    Kennelly said many restaurants get confused about the risks they take playing music because rules are written in "very complicated, very esoteric IP statutes."

    Kennelly said his clients, Allie Gamble and Shawn Skehan, believe musicians should be compensated for their work, but he said the lawsuits are a heavy penalty for trying to provide a little ambience to customers. And he feels that BMI's litigious strategy may result in some establishments wanting to give up playing any music at all.

    "A lot of companies can't be successful with these, in my opinion, frivolous lawsuits," Kennelly said. "This is about big companies who have gobbled up the right to these forms of entertainment and now are going after the little guy."

    Of course, BMI doesn't see it that way. The company says its legal actions provide songwriters a way to earn a living from their music.

    "BMI makes every effort to educate business owners as to the value of a license and the significant costs associated with copyright infringement," BMI spokeswoman Leah Lupo wrote in an email. "Legal action is a last resort after all other efforts have been exhausted."

    BMI reaches out to businesses, sometimes "dozens of times," before a lawsuit is initiated, Lupo said.

    But those discussions don't always pan out. Costs and resentment quickly mount for the venues that are sued, Vazzano said.

    Some may find the rules unjust, but BMI isn't afraid to sue over just a few songs. That leaves business owners spending thousands of dollars on a license undefined or risking it and hoping that a court summons won't appear on their door step.

    "You can't even sing 'Happy Birthday' without paying them," Vazzano said. n

  • 28 Mar 2014 11:37 AM | Anonymous
    Full Article:

    For most of us, the prospect of a 40 percent raise in pay would probably be pretty exciting. It would mean a big jump in disposable income, and would probably make it possible to do some thingsundefinedtake that vacation, replace that old carundefinedthat weren't really in the cards before.

    Protesters at a Walmart store Sept. 5, 2013, in Miami Gardens, Fla.
    Getty Images
    Protesters at a Walmart store Sept. 5, 2013, in Miami Gardens, Fla.

    The current push to increase the federal minimum wage from $7.25 per hour to $10.10, however, while it would constitute a nearly 40 percent pay raise for minimum wage workers, would almost certainly not translate into a similar increase in their economic wellbeing.

    For simplicity's sake, consider a minimum wage worker who regularly works 40 hours per week, 52 weeks per year. This worker would earn $15,080 per year at $7.25 per hour, and $21,008 at $10.10.

    That is, unquestionably, a substantial increase. But because of the way programs to aid the poor in the U.S. are structured, that shift would cause federal benefit payments to many minimum wage workers to be significantly reduced. Assistance program for the poor are, by definition, income-based, so as income rises, the payments are either reduced or, in some cases, cut off entirely.

    So, while he or she may have more disposable income than before, the post-increase minimum wage earner will be covering a higher percentage of his or her own basic living expenses out of earnings than out of public assistance.

    Just how much more? That turns out to be a bafflingly complex question. Public assistance programs are targeted to address many different problems, and typically base their payments on multiple factors, including family size, income level, state of residence, and more.

    And even within those categories, it's hard to get a clear read on how changes affect payments. For instance, some income-based programs, like the Earned Income Tax Credit, consider the recipient's annual income, while others, like the Supplemental Nutrition Assistance Program (SNAP, commonly known as food stamps) are based on monthly income

    This graph, from a study by Elaine Maag, C. Eugene Steuerle, Ritadhi Chakravarti, and Caleb Quakenbush, shows not only how many federal assistance programs an individual might qualify for, but also how dramatically some of them cut off at different income levels. (The chart, while somewhat dated, still accurately depicts the complexity of the federal benefits system.) 

    The changes in federal payments to low-income workers would be dramatically reduced by a minimum wage increase. According to the Center for American Progress, for example, an increase in the federal minimum wage to $10.10 would reduce federal spending on SNAP payments by $4.6 billion per yearundefinedmoney that recipients whose SNAP benefit was reduced would necessarily have to make up out of their increased earnings.

    Depending on their income levels, family structure, etc. minimum wage workers could also see a decline in their Earned Income Tax benefit as their take-home pay increases. The EITC, regarded as one of the most successful anti-poverty programs in existence, tapers off as income increasesundefinedand again, minimum wage workers would have to make up the difference out of their own earnings.

    To be clear, this is not an argument against raising the minimum wage. Advocates of the increase recognize that the change would include tradeoffs, but note that there are a number of social benefits. 

    Indiana Gov.: Minimum wage designed for entry-level wage
    Indiana Governor Mike Pence (R) provides insight on which policies in the state are instigating growth, and the impact of potentially raising the minimum wage.

    For instance, the implicit subsidy that for-profit companies are able to employ workers at an artificially low wage would be reduced.

    But some feel the more important benefit would accrue to the low-income workers who, while perhaps not benefiting from dramatically higher incomes, would benefit from seeing their work compensated at a level closer to a living wage.

    "On the one hand, benefits falling reduces the gains from a minimum wage increase," said Sharon Parrott, a vice president with the Center on Budget and Policy Priorities in Washington. "But I think people in the real world would rather have higher income and fewer benefits."

    By Rob Garver of The Fiscal Times.

  • 28 Mar 2014 11:28 AM | Anonymous
    Full Article:

    CEO of CKE Restaurants Andy Puzder warned Connecticut’s minimum wage increase is based on faulty assumptions about economics Thursday on Fox News.

    Gov. Dan Malloy (D) plans to sign the bill into law which would increase the minimum wage $10.10 in Connecticut, the highest of any state.

    Puzder slammed Gov. Malloy’s argument that the new minimum wage willbenefit low wage workers, suggesting the governor could use a course in economics.

    “When you raise the minimum wage, everybody who has to pay the minimum wage raises their prices to cover the costs of the wage increase. So, what they’re buying costs more, and if you have inflation in products and wages you don’t end up in a different place,” he said.

    In addition to the increased cost of goods, Puzder also pointed out raising the minimum wage will cost jobs, directly hurting the people it is supposed to help.

    “I think politically it’s probably a very good issue for people that support a minimum wage increase because I think people feel very good when you say, we’re going to increase, the next check you’re going to have more money. You feel good about that but you don’t realize things are going to cost more, there’s going to be fewer jobs, and those 500,000 people if we did this federally that won’t have jobs, they’re not going to have any wages. So economically it’s not a good move.”

    Full exchange:

    NEIL CAVUTO: The governor, Governor Malloy, disagrees with that notion, he says guys like you are forgetting the benefits of doing that and the people who get paid more will spend more, in fact in that income range, that they will spend virtually all of it. So it actually helps the economy. What are you saying?

    ANDY PUZDER: Well, I think that the governor could use a course in economics. If you undefined when you raise the minimum wage, everybody who has to pay the minimum wage raises their prices to cover the cost of the wage increase. So, what they’re buying costs more, so if you have inflation in products and inflation in wages, you don’t end up in a different place so which is why every few years people talk about increasing the minimum wage. This misallocates expenses. This is not something, particularly the federal government is very good at,  when they’re trying to set prices, they’re trying to set the cost of labor. You can say that it does that, and I think politically it’s probably a very good issue for people that support a minimum wage increase because I think people feel very good when you say, we’re going to increase, the next check you’re going to have more money. You feel good about that but you don’t realize things are going to cost more, there’s going to be fewer jobs, and those 500,000 people if we did this federally that won’t have jobs, they’re not going to have any wages. So economically it’s not a good move.

  • 14 Mar 2014 9:47 AM | Anonymous
    Full Article:

    When Connecticut became the first state in the nation to mandate paid sick leave for hundreds of thousands of service workers, we were warned to expect dire economic consequences. This left us concerned about the law's timing, as the state sought to recover from a recession.

    But nothing happened.

    It's true that quite a few more people have been paid to stay home when they are sick during the past two years, but sick people staying home has had little impact on the state's economy.

    The Washington-based Center for Economic Policy Research found that only 10 percent of the companies it surveyed reported that they were forced to increase payrolls by more than 3 percent as a result of the law.

    Predictions that the law would lead to reduced wages and hours for as many as 400,000 workers apparently didn't pan out either. The center reported that just over 10 percent of the employers surveyed said they reduced working hours and only 1 percent reduced wages.

    The law barely passed in the final hours of the 2011 session of the General Assembly. It got through the Senate by an 18-17 vote and the House, 76-65, with many conservative Democrats agreeing with the Republican minority that the bill was a job killer. There were warnings that the economically distressed Connecticut would be sending a terrible message to the nation's businesses by becoming the first state to take such drastic action.

    But the law also came with many exemptions. It applies only to businesses with 50 or more employees and exempts manufacturing companies and nationally chartered nonprofit organizations as well as day laborers, independent contractors and temporary workers.

    Those covered are primarily service workers who receive an hourly wage - like waiters, cashiers, fast-food workers, hairdressers, security guards and nursing home aides. It allows them to receive up to five paid sick days a year.

    The authors of the study said part-time workers were most affected by the new sick leave policy and many of them are employed in the retail and hospitality industries, which have grown since the law was implemented in 2012.

    So why did the dire predictions fail to materialize? There were, of course, those exemptions for employers with fewer than 50 workers and all manufacturers. But many of these Connecticut businesses already had paid sick leave policies, some similar or better than those covered by the new law.

    An immediate result of the law was a reduction in the number of workers who went to work sick, a benefit not only for them, but also for those who worked with them or received their services. One needn't conduct a study to determine businesses like nursing homes and restaurants especially need healthy workers to care for their sick and elderly residents or their food-consuming customers. And the survey did not attempt to measure the economic benefits derived from sick workers not spreading their illnesses to others.

    Connecticut remains the only state with mandatory paid sick days for these workers but bills have been introduced in legislatures across the country and have been passed or implemented in cities in California, Washington, Oregon, New Jersey and New York.

    New York City's law, passed last year over the veto of outgoing Mayor Michael Bloomberg, goes into effect April 1. It is a bit more liberal than Connecticut's law, allowing workers to earn an hour of paid sick leave for every 30 hours worked, as opposed to Connecticut's 40, with the same cap at five days.

    And so it appears the alarm sounded over paid sick leave will prove to be as false as those tolled for every historic improvement in the worker's lot, from the abolition of child labor and the reduction of the work day and week to the introduction of Social Security and the minimum wage.

    Each of these laws improved the lives of our hardest working and poorest paid men and women and made us a stronger and better nation.

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