Legislature’s Joint Committee on Labor and Workforce Development hears proposal; backers cite double-digit inflation, other factors; business owners balk, say layoffs and higher prices, more inflation will follow
By Steve Freker
In 2014, Massachusetts emerged as one of the first states leading the charge to raise the minimum wage to $15 per hour – where it stands now after a push that started when the minimum stood at $8 an hour. At $15 per hour, Massachusetts now has one of the highest state minimum wages in the nation.
Some state legislators want to make it even higher – as soon as possible – due to the high cost of living and inflation concerns here. On Tuesday, a familiar voice led a renewed call to hike the minimum wage in the Commonwealth, as State Senator Jason Lewis (D-5th Middlesex) urged lawmakers to back a push to raise the pay rate even higher, this time to $20 per hour by 2027. Additionally, a joint legislative contingent seeks to tie even further future minimum wage hikes over $20 per hour, indexing more hourly raises down the road to increase in the inflation rate.
“We need to raise the minimum wage again,” Senator Lewis, one of the bill’s primary sponsors, told the committee Tuesday. “Nobody expected that we would be seeing close to double digit inflation. That level of inflation has really eaten into the real earnings that our residents are taking home.”
The cost of living in Massachusetts continues to soar higher than in most other states in the New England and the Northeast, supporters of higher wages claim. In Massachusetts, increases in recent years that have nearly doubled the minimum wage from $8 to $15 per hour since 2014 have not kept up with record high inflation and the Commonwealth’s rising cost of living, higher pay backers say.
Those who have historically been against the minimum wage hikes, primarily critics who operate Massachusetts businesses, claim another substantial hike such as this would hurt employers in several ways, cause layoffs and generally impact the state’s economy adversely. A recent report released by the National Federation of Independent Businesses (NFIB) estimates the new Massachusetts wage hike plan would cost an estimated 23,000 jobs – or 0.5% of the state’s employment base – many of them among small business owners. In an online report, Chris Carlozzi, NFIB’s Massachusetts state director, said the report shows “now is not the time” to raise the minimum wage floor to $20. He added that such a move “would hurt small businesses and consumers.”
“Raising the base wage to $20 is not only unsustainable for Massachusetts employers who are already raising compensation to counteract the state’s labor shortage and attract workers into the workforce,” Carlozzi said. “These types of one-size-fits-all mandates hurt smaller, Main Street businesses that cannot absorb the cost the most.”
Massachusetts has one of the highest state minimum wages in the nation, which rose to $15 per hour in January under a 2018 agreement between lawmakers, worker advocates and the business community. The wage has increased nearly every year since 2014, when it was $8 an hour.
The minimum hike wage proposal also calls for raising the state’s sub-minimum “cash wage” at restaurants and bars from $6.75 per hour to $12 per hour by 2027. Cash wages allow employers to meet their minimum wage obligation for tipped workers using a credit for customer tips.