In response to concerns about the Commonwealth’s long-term economic competitiveness, the Massachusetts State House approved a bill Wednesday that would raise the minimum hourly wage from its current level of $8.00 to $10.50 over the course of three years.
The bill passed on a largely partisan vote of 125-24 , with Democrats primarily supporting the bill and Republicans mostly opposing it.
The minimum wage for tipped workers would increase from the federal minimum of $2.63 to $3.75 per hour and the minimum wage for farm workers would see a drastic jump from $1.60 to $8.00 an hour. This would reform the state unemployment insurance system by closing loopholes and lowering the tax burden on employer contributions.
“[This] will not only put real money into the pockets of working families, but will create more jobs and grow the economy,” said Massachusetts Rep. Tom Conroy, chair of the Joint Committee on Labor & Workforce Development, in a Thursday release. “No one who works full time should be living in poverty, and today’s vote will help bring an end to this situation. It’s also a significant step toward addressing the rising income inequality in our state.”
The passage of this bill comes shortly after a bill passed in the Massachusetts Senate that includes raising the hourly minimum wage to $11.00, increasing the tipped wage to $5.50 and tying future increases to inflation, unlike the House bill. These differences will need to be hammered out before a final bill can be sent to Massachusetts Gov. Deval Patrick’s desk.
Todd Idson, a professor of economics at Boston University, said although the traditional model of employment taught in basic economics would predict that a higher minimum wage would cause significant job loss for exactly the low-skilled workers it is designed to help, new research has challenged this theoretical assumption.
“Many economists who would have said that minimum wage is a bad idea have softened their stance over the years and have said that a wage increase that isn’t massive perhaps won’t produce meaningful job loss,” he said. “Frankly we can’t be sure what will happen, but most of the research points to this kind of $2.50 increase as the cause of some job loss but that it’s not going to be huge job loss.”
Idson also said increasing the minimum wage is not a cure-all solution and that other policies should be used in conjunction.
“The goal of the minimum wage is to help out poor workers, but there [are] quite a number of minimum wage workers who are not poor such as teenagers who live in middle class families,” he said. “One problem with the minimum wage is that we are using our resources as a society to help people who we want to help but also to help a lot of people we don’t want to help.”
A number of residents had strong opinions on the minimum wage. Some said it is too low for the current levels of inflation, but others said indirect consequences must be considered.
“It obviously hasn’t kept up with inflation so it’s probably a little low,” said Melissa Brown, 28, of Brighton, who has worked many minimum wage jobs. “I don’t think [increasing the minimum wage to] 10.50 is a giant leap, so I don’t think it will upset any balance.”
Anne-Marie Rossi, 50, of Kenmore, said the bill could have a high impact on small companies and young people.
“It’s bad for small companies that have to pay [a higher minimum wage],” she said. “Minimum wage jobs are often, but not always, for high school or college kids. People might lose incentive to go on to something else. I know it’s not much, but I don’t look at it as a family supporting job.”
Ben Chase, 23, of Brighton, said the higher minimum wage may price some workers out of the market and may encourage them to continue their education.
“Forcing teenagers or lower-skilled workers out and forcing them to develop their skills more, will ultimately make more quality workers in the long-run,” he said.
Chase spent time advocating for a higher minimum wage while in college in western Massachusetts and is in favor of the bill.
“It’s what really needs to happen right now to raise the quality of life in our state,” he said, “because Massachusetts has always been very much the poster child for the rest of the United States.”