MINIMUM WAGE HIKE ON JANUARY 1

By Bob Katzen

The state’s minimum wage goes from $11 per hour to $12 per hour beginning January 1. It is the first step in an annual hike of $1 until it reaches $15 per hour in 2022. The Legislature approved the raise in June 2018 and Gov. Baker signed it into law. The raise was part of a package which also included an increase in the wage for tipped workers from $3.75 to $6.75 over five years; the phase out over five years of extra pay for employees who work on Sundays and holidays; a permanent sales tax holiday on a weekend every August; and a $1 billion family and medical leave program funded by a payroll tax paid for by both employers and employees.

According to a new study released by the Massachusetts Budget and Policy Center, the hike will benefit an estimated 662,000 workers, with a total wage increase of $817.5 million. The study says the hike will give a raise to 68 percent of food service workers and about a third of workers in human services – including human service workers in the fields of child welfare, disability services and elder services.

“Minimum wage increases are essential to helping people put food on the table, and they help support the local economies in which workers spend their money,” said Jeremy Thompson, Senior Policy Analyst at MassBudget. “Moreover, if not for periodic minimum wage increases, hundreds of thousands of the lowest-wage workers in the state would have seen the real value of their wages fall over the past couple of decades.”

“This is a positive step for Massachusetts, but our work is not done,” said Marie-Frances Rivera, Interim President of MassBudget. “In a state with such a high cost of living, we need to do more work to make sure our family, friends, and neighbors can make ends meet.”

“Combined with the recently implemented $3 increase (which began January 1, 2015), this $4 increase over five years adds up to nearly a 90 percent increase in the Massachusetts state minimum wage,” said Jon Hurst President of the Retailers Association of Massachusetts who opposes the hike. “This unprecedented and dramatic 88 percent increase over nine years compares to a likely cumulative inflation rate of under 20 percent. Profitability for small employers with tight margins will be severely impacted, as will the availability of jobs for teenagers, which already number far fewer in Massachusetts than in the late 90s.

Hurst noted that 39 states have teen wages but Massachusetts does not despite having the highest minimum wage in the nation. Teen wages allow employers to pay workers under 18 years a lower minimum wage. “Beacon Hill leaders should make our young people a priority and pass legislation in 2019 authorizing a 90-day teen wage to incent employers from stores, restaurants, municipalities, to YMCAs to hire our 14-17-year olds,” concluded Hurst.

Paul Craney, Executive Director of the Massachusetts Fiscal Alliance said, “The New York Times, hardly a conservative publication, once wrote in their January 14, 1987 editorial: ‘The idea of using a minimum wage to overcome poverty is old, honorable — and fundamentally flawed. It’s time to put this hoary debate behind us and find a better way to improve the lives of people who work very hard for very little.’”

“Those words are just as true today,” continued Craney. “When government regulates something, you get less of it. When government increases the cost of labor, it only hurts the consumer and the workers who will be offered less low skilled jobs.”

Leave a Reply