United States

Waterbury Company Could Leave After Minimum Wage Hike

Forum Plastics, LLC. has been making medical devices in Waterbury for eight years, but says the state's plan to raise the minimum wage to $15 by 2023 makes it unaffordable for them to do business in Connecticut.

A bill to raise Connecticut minimum wage to $15 is almost a done deal. But some say that change is coming at a price to local business owners.

Forum Plastics, LLC. has been making medical devices in Waterbury for eight years. The company started in Stamford in 1992, but its president says its days in Connecticut are numbered.

“We have a lot of minimum wage employees. It’s kind of the nature of our business,” said Mark Polinsky, president of Forum Plastics, LLC. “When the minimum wage hits $15 an hour it’s gonna have about a $1.2 million effect on our profitability.”

Friday, the state Senate passed the minimum wage bill which incrementally increases the minimum wage, starting in October. The bill already passed the House and is awaiting the governor’s signature. Wages will increase by $1 each year until they hit $15 an hour in 2023. Ultimately, beginning January 1, 2024, the minimum wage will be indexed to the employment cost index, which is calculated by the U.S. Department of Labor.

“It will reduce our profits from nine percent to less than two,” said Polinsky.

The company employs roughly 150 people Polinsky said around 80 are full time and 65 are temporary workers. He said 100 of their employees make $15 an hour or less.

“We’re squeezed in the middle,” he explained. “My customers buy products from China, from Mexico, from outside the US. I can’t go to them and say listen I need to charge you more because of the minimum wage is going up.”

Instead of raising prices, Polinsky said the company will cut jobs to cover the new cost of doing business in Connecticut.

“In the next six months we’re going to try to significantly reduce our workforce with automation. We have to.”

“I know they’re looking for their best interests but I think they could push it a little more to help the working group,” said Neldy Echebarria, a Forum Plastics employee for over seven years. “It’s going to be difficult for them to find a job in Waterbury because the companies are leaving Waterbury.”

“Here we go again. Been through it in the past and it’s not a fun thing,” added Santiago Cora, referring to another company he worked for that went through a round of cuts.

Although Cora is a full-time technician, he said he’s worried about his job.

The cuts are just the beginning. Right now, the company covers 80 percent of their employee’s health insurance costs. Employees will be asked to pay a bigger piece of the pie.

Forum’s owner has also said that he plans to close the plant and set-up shop in another state in the next four years.

“It kind of hurts a little to see that a good company like this, because of the economy and the minimum wage, had to move out of state,” said Cora.

“There’s nobody working. So, what is this accomplishing,” asked Waterbury resident Kevin Russell. “They won’t be the only ones to leave.”

Opponents of the minimum wage hike think the increase will ultimately be passed onto them.

“I think it’s absolutely awful. I mean we are barely surviving as it is,” said Sharon Zabbara of Wolcott.

Zabbara said she and her husband have considered leaving Connecticut.

“It’s sad to say but it’s almost becoming unaffordable, just unaffordable to stay in Connecticut anymore,” she pointed out.

Her son, Alex, has held a number of minimum wage jobs. With one more year left at the University of Connecticut, he's also worried as he looks towards his own future.

“I was thinking initially that within the next year I’ll be better off with a higher minimum wage but as someone who’s going to be getting a degree in electrical engineering there’s a lot of smaller business that are looking for engineers that may be moving out of Connecticut,” said Alex.

Connecticut Gov. Ned Lamont believes the hike will spur growth.

“This is a fair, gradual increase for the working women and men who will invest the money right back into our economy and continue supporting local businesses in their communities,” he said in a statement.

Polinsky said Forum plans to cut five to 10 jobs in the next six months and ten more each time the wage goes up. They plan to be moved out of Connecticut by the time it reaches $15 an hour in 2023.

He added that the company will offer employees jobs in their new location, which will likely be North Carolina or Texas.

Cora said he doesn’t blame the business for worrying about their bottom line and would gladly follow them wherever they end up.

“The company has to better themselves, just like we have to better ourselves,” he said.

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