If we pay a living wage, our businesses will suffer, argue lobbyists and business owners opposed to increasing the minimum wage

“It can’t be, or at least it shouldn’t be, that we can have a successful, vibrant economy only if we pay workers wages that are insufficient to meet their most basic needs."

Representative Arthur Corvese, Committee Chair

In a hearing that highlighted a fundamental disagreement over the purpose of the minimum wage and the economic consequences of raising it, virtually every Rhode Island business represented by a trade association opposed it.

The Rhode Island House Committee on Labor heard three bills seeking to raise the minimum wage:

• H7770, from Representative David Bennett (Democrat, District 20, Warwick, Cranston), would increase the minimum hourly wage commencing January 1, 2029, by an amount equal to the total percentage increase in the Consumer Price Index for all Urban Consumers (CPI-U) for the Northeast Region for the calendar year 2027;

• H7769, from Representative Jenni Furtado (Democrat, District 64, East Providence, Pawtucket) would set the minimum wage for 2027 at $20 per hour; and,

• H7771, from Representative Enrique Sanchez (Democrat, District 9, Providence), would set the minimum wage for 2027 at $24 per hour.

Here’s the video, edited to exclude bills and discussions not related to the three minimum wage bills.

Proponents, including labor representatives, public health professionals, and economic justice advocates, argued that the current minimum wage was not a living wage, forcing full-time workers into poverty and creating health inequities. They contended that raising the wage would provide economic stability, stimulate local economies, and offer dignity to workers.

Opponents, primarily small-business coalitions and a hospitality association represented by well-connected, high-priced lobbyists, argued that significant wage increases would hinder small businesses already facing high costs. They warned, without evidence, that raising the minimum wage would lead to higher prices, inflation, and job losses, making Rhode Island less economically competitive.

But the core of the opponents’ argument is that most businesses in Rhode Island cannot survive if they are required to pay their workers a wage sufficient to lift them out of poverty. In other words, an “economically competitive” Rhode Island depends on the exploitation of low-income workers.

Among the lobbyists present to make these arguments were:

• Jason Martesian, representing the Rhode Island Business Coalition;

• William Walsh, representing the Northern Rhode Island Chamber of Commerce, the Rhode Island Builders Association, the Rhode Island Hospitality Association (RIHA), the Rhode Island Marine Trade Association (RIMTA), and the Construction Industries of Rhode Island;

• Robert Goldberg, representing the Greater Providence Chamber of Commerce; and,

• Ryan Moot, manager of Government Affairs at RIHA, who doesn’t appear to be registered as a lobbyist.

Some business owners, such as David Levesque of Brewed Awakenings, also spoke in opposition:

“I don’t know how many of you guys actually sign the front of a check, but I do. And many of the businesses that I work with also believe in what I’m about to say: You guys are trying to push a minimum wage so we can have a livable wage. Well, what is a livable wage? What’s it for you? What’s it for you? It’s different for everybody.

“I can tell you, when my daughter started working for me a year and a half ago, at 15 years old, she wasn’t worth $15 an hour. She had no experience. She hadn’t worked before, but you required me to pay her $15 an hour. So the worker that’s been with me longer, eight, nine, 10, or 20 years… We can’t afford to pay more when we’re forced to pay an entry-level worker an unacceptably high wage. There needs to be an entry-level wage.

“Given what you’re proposing, why stop at $20 or $24? Based on the way the state’s running: energy costs, electrical, heating, taxes, it might as well be $50 or $60 an hour because $20 and $24 ain’t enough for anybody to have a livable wage. You’ve got to think about the businesses. [Earlier, we heard that] restaurants have a three, four, five, six, or eight percent bottom line. That’s all you got. We struggle to survive. You guys are driving up costs…

“It’s important that you guys think. You shouldn’t be forcing us to raise the minimum wage. I don’t believe anything you guys are saying, but I will tell you, if you come work at Brewed Awakenings, you don’t make $16 an hour. You don’t make $17, $18, $19 or $20. The lowest paid work in our company is $21 an hour, and it’s not because you guys dictate it. It’s because of the way we run the company. It’s because of the people who work for us. That’s at the bare minimum. People who are there longer, we try to give them more money. But when you force me to pay my daughter, who’s an entry-level worker, and now you want [me to pay her] $20 an hour? Well, guess who’s not going to have that longtime job? The worker who’s been there 10, 15, or 20 years, because you won’t be able to afford them. It’s not the way to run a business.

“Businesses in Rhode Island are good. They take care of their employees. Please understand that, and let them do their job without getting involved in any wage compensation. If somebody’s abusing their employees, absolutely. But to stand there and think you can dictate a livable wage, you have no idea how somebody lives. You don’t know what they need. You can never meet that objective. So I disagree with all these bills, and I think you guys need to stay out of business and let us do our job.”

Levesque’s testimony was odd because he immediately followed the testimony of Alan Krinsky, the Director of Research and Fiscal Policy at the Economic Progress Institute. Krinsky had just spent time explaining exactly what a livable wage is, based on the comprehensive research that the organization puts into its biannual Rhode Island Standard of Need report:

“It can’t be, or at least it shouldn’t be, that we can have a successful, vibrant economy only if we pay workers wages that are insufficient to meet their most basic needs. Every two years, our organization produces this report, the Rhode Island Standard of Need. We’ll have a new edition coming out later this year that looks at what a basic-needs budget is for individuals and families of different sizes.

“In the 2024 edition, we determined that it costs a single adult worker, working full time without any children, $23.47 an hour to meet basic needs - not to take vacations before - but basic needs. For two adults working full-time with two children, each needed about $25.75 an hour, and I won’t even go into a single parent with two children.

“Representative Sanchez’s proposal would at least get folks to the equivalent of a basic-needs budget in 2024 - not a true living wage in 2027 - but it’ll be much closer than what we’re at now. Short of this, Representative Furtado’s $20-per-hour proposal would be a welcome step in that direction.

“As to Representative Bennett’s bill, we should certainly add an annual inflation adjustment. Connecticut already has this. When Connecticut moved to $16 per hour, they had that in place. It then went up to 1$6.35 last year and to $16.94 this year.

“Whatever proposal one would accept for raising the minimum wage, we should add an inflation adjustment to it. Preferably, we’d raise the minimum wage first, then add an inflation adjustment to the base amount.

“Increasing the minimum wage will increase equity. It will increase the amount of money circulating in the economy, but most of all, we need to get Rhode Island to a place where hardworking Rhode Islanders can earn at least a basic-needs wage and, eventually, a living wage for working full-time.”

At the conclusion of David Levesque’s testimony, Representative Brandon Potter (Democrat, District 16, Cranston) had some questions:

Brandon Potter: Sir, are you aware that when the minimum wage was enacted, it was meant to be a livable wage?

David Levesque: No, I’m not aware it was meant to be a livable wage.

Brandon Potter: I would encourage you to go back and review that basic part of American history, because that might better inform you. Secondly, let me ask you this: You said that you’re struggling to survive… and it’s your testimony that some of the struggle you’re having is because of the minimum wage type laws that we enact here in the General Assembly, right? It puts a constraint on your business. Is that a fact?

David Levesque: It absolutely does when you tell me I have to pay a worker a certain wage, and I used my own daughter as the example. Let me ask you, my daughter, 15. Do you think she’s worth $16 or $17 an hour for a first-time job?

Brandon Potter: But didn’t you testify a moment ago that you pay well above the minimum wage? So how can your testimony be both that you pay well above the minimum wage, but that you’re also so pressured by minimum wage laws that even your own daughter isn’t worth that amount of money?

David Levesque: I’ll go back to the example: Somebody who doesn’t have the skills - that’s an entry level, you can’t be dictating to businesses in Rhode Island that they should be paying a livable wage for that person. We send people to school to learn so they can enter the workforce and earn a job based on those skills. Not everybody should be paid the same amount of money. It’s based on skill. If you’re working for me and you’ve been there for a long time, you might be worth $25 or $30, but when you force me to pay my daughter $16 to $17, I can’t give [the more experienced worker] the $25 to $30. You [the General Assembly] should not be in the business of telling businesses what they should pay. You have no idea how to run a business. You don’t employ people.

Brandon Potter: I don’t have any further questions for the witness, Chairman. I would just respectfully say that, actually, that is what we do. As a governing body and a state legislature, we pass laws that, in part, regulate business. That’s a core function of what we do.

Chair Arthur Corvese: It is within the purview of the General Assembly to enact laws. How we decide to enact those laws is a dynamic between the public and their elected officials.

David Levesque: Understood.