By Bob Katzen
House 119-24, Senate 30-8, approved and sent to Gov. Charlie Baker a bill that would hike the minimum wage from $11 to $15 over five years; increase the wage for tipped workers from $3.75 to $6.75 over five years; phase out over five years extra pay for employees who work on Sundays and holidays; institute a permanent sales tax holiday on a weekend every August; and establish a $1 billion family and medical leave program funded by a payroll tax paid for by both employers and employees.
Dubbed the “Grand Bargain Bill” by its supporters, the compromise bill is in response to the likely successful effort by the Raise Up Massachusetts coalition to get the minimum wage and paid leave questions on the November ballot; and the likely success of the Retailers Association of Massachusetts (RAM) to get a question on the ballot to reduce the sales tax from 6.25 percent to 5 percent.
Raise Up Massachusetts has agreed not to bring its family and medical question to the ballot while RAM has agreed to drop its effort to reduce the sales tax to 5 percent. The fate of the minimum wage ballot question is undetermined. The version passed by the Legislature differs from the ballot question version in several ways. The legislative version gives the raise to $15 over five years rather than the four years on the ballot version; does not include tying the minimum wage to inflation; and includes phasing out extra pay for employees who work on Sundays and holidays.
RAM President Jon Hurst had mixed feelings about the compromise but ultimately embraced it. “The compromise legislation passed today contains very costly initiatives that will negatively impact the thousands of small business owners and their employees that RAM represents,” said Hurst. “The retail marketplace has never been more competitive, and the margins have never been smaller. The new payroll mandates passed today will significantly increase costs, resulting in businesses being less competitive, forcing some doors to close and good jobs to be lost. This is not rhetoric, but reality. At the same time, the results would be far worse had these measures gone to the ballot, and the Legislature deserves credit for bringing the parties together to bring a balanced resolution.”
Meanwhile, critics of the compromise say that RAM was able to extract compromises from Raise Up by using the sales tax cut as a bargaining chip. The Supreme Judicial Court had just ruled that a proposed ballot question imposing an additional 4 percent income tax on taxpayers’ earnings of more than $1 million cannot go on the November 2018 ballot. Supporters of that measure saw millions of tax dollars lost as a result of the decision and said that reducing the sales tax would cause a fiscal crisis and require cutbacks of many programs.
“This bill empowers workers, recognizes the needs of business owners, and ensures that Massachusetts residents will no longer have to choose between caring for a sick relative or losing their job,” said Rep. Paul Brodeur (D-Melrose). “It is the result of months of negotiations and demonstrates that regardless of what happens in Washington, here in Massachusetts we focus on cooperation and compromise.”
“I fundamentally disagree with the premise that we have to give up some workers’ rights in order to gain new workers’ rights,” said Sen. Kathleen O’Connor-Ives (D-Newburyport). “This bill ends time and a half on Sundays in order to start paid family and medical leave and phase-in a $15 minimum wage. This was a strategic decision in order to prevent these issues and the sales tax roll-back from going on the ballot. I would rather see the ballot question process play out and then respond as a Legislature and raise lost revenues by ending wasteful corporate tax credits if the sales tax was rolled-back to 5 percent.”
“This deal represents a series of compromises made in the best interest of the commonwealth,” said Rep. Joseph Wagner (D-Chicopee). “By reaching a thoughtful balance, this package will protect Massachusetts workers while promoting a competitive environment for our local businesses.”
“My ‘no’ vote is for a better minimum wage” said Sen. Marc Pacheco (D-Taunton). “My ‘no’ vote is for hardworking Massachusetts citizens, many of whom depend on the guarantee of a fair wage for working Saturdays and Sundays. My ‘no’ vote is for the rights of Massachusetts voters who brought this initiative forward so that the people would be able to decide the issue for themselves.”