STATE HOUSE — Senator Leonidas P. Raptakis (D-Dist. 33, Coventry, East Greenwich, West Greenwich) wants to tie Rhode Island’s minimum wage to the consumer price index and give tax credit to businesses adjusting to a $15 minimum wage.
In a statement about his plan, Raptakis said it’s inspired by the news of small businesses across the country shut down and job losses due to COVID-19. Raptakis said it’s more important than ever to balance living wages with the need to protect small businesses and give them a predictable way to plan for wage hikes.
Raptakis said he plans to introduce two bills. The first would increase the state’s minimum wage by having Rhode Island join with twenty other states that have tied increases to the Consumer Price Index (CPI) and set up a study commission to examine what Rhode Island’s true minimum wage should be. He is also proposing legislation to provide a tax credit for businesses that will be affected as the minimum wage increases to the $15 benchmark.
“In the months ahead, we’re going to be trying to emerge from the economic crisis caused by COVID-19, involving the loss of many small businesses and significant job losses,” Raptakis said. “This gives us a unique opportunity to craft a better model for planning out wage increases. Instead of leaving it to the mercy of politics, let’s give businesses a predictable and sensible roadmap for providing a living wage.”
By linking minimum wage increases to a hard data point such as the CPI, which is released by the U.S. Department of Labor each March, the proposal would give businesses and employees nine months to prepare for a new minimum wage which would take effect on Jan. 1, 2022.
Under Senator Raptakis’ tax credit proposal, businesses with employees under an increased minimum wage would get a credit to help make up the difference from the previous minimum wage. For example, with $11.50 an hour as the baseline, employers who hire a new employee this year at $12.25 an hour, would receive a credit of $0.75 an hour for each employee. The credits would cap at $3.50 per employee/per hour once the minimum wage reaches $15.
“We know the big box stores can handle increases to the minimum wage — we’ve seen how they do it in the past, by eliminating positions and having more self-checkout machines,” said Senator Raptakis. “We want to have an approach to wage growth in Rhode Island that also supports business growth and job growth. The way to get there is with regular, periodic increases tied to the Consumer Price Index.”
Raptakis has introduced similar legislation for the past several years. Last legislative session, in addition to introducing his bill (2020-S 2297) to tie future minimum wage increases to the CPI, he also introduced legislation (2020-S 2406) that would have created an 11-member Senate commission tasked with making a comprehensive study of Rhode Island’s minimum wage, including a comparison and analysis of neighboring states’ practices and to provide recommendations that would benefit all Rhode Islanders.
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