The COVID-19 pandemic has brought about incredibly hard economic times for Rhode Island, and the numbers to back that up are jarring.
The state’s unemployment rate in August sat at 12.8 percent, the second-highest in the country. In February, unemployment in Rhode Island at 3.4 percent — tied for 22nd-lowest.
Jobs in every state industry except two, according to the U.S. Bureau of Labor Statistics, have decreased compared to August of 2019, including a 21.5 percent drop in those employed in leisure and hospitality — an industry that employed 60,000 Rhode Islanders at this time last year.
In the second quarter, the Rhode Island Economic Indicator Briefing reported an economic contraction of 40.6 percent of the state’s gross domestic product (GDP), a harder hit than regional counterparts or the national average. In May, experts projected an economic recovery for the state that would take three years.
On a more local level, dozens of Rhode Island restaurants are closing. Bravo Bistro in downtown Providence shut its doors permanently at the start of the pandemic, as did Nick’s of Westminster. Eleven Forty Nine and Blackies followed. Now, Venus De Milo and Birch are in the process of shutting their doors.
The economic crisis that this pandemic presents for the state of Rhode Island is dire and jarring. Yet, in the midst of all this, Rhode Island is raising its minimum wage.
The bill to raise the state’s minimum wage was first signed in March, just days before the most dramatic impacts of the COVID-19 pandemic were felt. It pledged that on October 1, minimum wage would increase from $10.50 to $11.50 an hour, continuing the push since 2012 to achieve a living wage of $15 by 2023.
Minimum wage must be increased, and the state’s continual progress in the direction of a living wage is commendable. Raising the minimum wage allows for families on the brink to live with dignity and afford the amenities in life that every American deserves.
Now, however, is not the time to push for such change. The economic situation that Rhode Island finds itself in — while better than what it faced just months ago, when the outlook and prognosis was far more dire — is still not strong. Many small businesses are still teetering on the brink, and now is not the time to mess with the narrow financial margins of survival.
“While lawmakers may think they are helping workers by raising the minimum wage they may end up harming them as small businesses like food service, retail and hospitality still struggle to recover from months of shutdowns and restrictions,” a news release from the National Federation of Independent Business read.
The General Assembly hasn’t met since March, which is problematic for a number of reasons. It must reconvene and roll back the minimum wage hike temporarily to ensure the solid economic growth and return from the brink for Rhode Island small businesses, which have been through enough as is.
Some may argue that families and individuals are struggling during these times, as well. It’s not just the businesses that are closing; Rhode Island’s unemployment is soaring and the financial security of those in the state is also on the brink.
In normal times, this argument would stand true. But in a time when small businesses have little, if any, financial flexibility, forcing this wage hike will not lead to fatter paychecks — it will lead to no paychecks.
The General Assembly must meet and rollback the minimum wage hikes to ensure the continued financial security of small businesses in Rhode Island. There will come a time when minimum wage increases are necessary, but that time is not in the middle of a pandemic.
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