Speaking to low-income workers and activist groups at the Statehouse yesterday, Rep. James Marzilli (D-Arlington) and Sen. Marc Pacheco (D-Taunton) promoted a house bill that would increase the Massachusetts minimum wage from $6.75 to $8.25 per hour by 2007, including adjustments for inflation.

The bill also includes measures to raise the minimum wage each subsequent year, using the Consumer Price Index that would account for inflation rates.

“We are one of the most expensive states to live in,” Marzilli said. “I believe in the fundamental right that a hard day’s work deserves a fair day’s pay.”

The bill would increase Massachusetts’s minimum wage to over $3 more than the federal minimum of $5.15 per hour and would give the state the highest minimum wage in the Northeast. The Committee on Labor and Workforce Development already approved a smaller minimum wage increase to $7.75 without wage indexing last week.

Pacheco said increasing the minimum wage to the full $8.25 with wage indexing is vital to strengthening the state.

“Minimum-wage workers are keeping Massachusetts moving,” Pacheco said. “They are the core base of the economy. We need to pass legislation that will help people each and every year.”

Attorney General Tom Reilly, a Democratic gubernatorial candidate, said he would sign the bill if he were elected governor. No date has been set for a house vote as of yet.

“This is about basic fairness,” Reilly said. “It is not too much to ask to be given a fair wage.”

According to Marzilli, since the last minimum wage increase from $6 to $6.75 in 2001, a full-time minimum wage worker has lost $1,900 per year due to inflation costs. He said the bill would lead to pay raises for almost a half million minimum wage and borderline minimum-wage workers in 2007.

“No person that works in the Commonwealth should be forced to choose between healthcare and rent fees,” Marzilli said.

The bill would present a stark difference to New Hampshire’s minimum wage of $5.15 per hour, placing the highest and lowest minimum wages in the Northeast next to each other. Randy Albelda, a University of Massachusetts-Boston economics professor, said the bill would attract low-income workers from New Hampshire. Albelda added that the bill would help diminish economic inequality in Massachusetts, narrowing the gap between the rich and poor.

“[Increased minimum wage] causes workers to worker harder and stay longer at the job,” Albelda said. “That increases productivity.”

Carl Nilsson, campaign director of Neighbor to Neighbor, a low-income activist organization that lobbies for health care and tax legislation reforms, said the biggest opposition to the bill has come from businesses that fear they would have to cut employees due to salary raises.

A 2004 Employment Policies Institute study conducted by Cornell University economics professors Richard Burkhauser and Joseph Sabia found an increase in minimum wage would harm employment opportunities for low-skill entry-level employees, generally without a high school diploma.

The study, which was conducted in response to a federal proposal to increase the minimum wage to $7.00, found that only 15 percent of the wage increase would benefit families below the poverty line while 60 percent of the benefits would go to families earning two times above the poverty line.

But Arnold Hiatt, former CEO of the Stride Rite Corporation and the chairman of Business for Social Responsibility, said the bill would improve the success of all Massachusetts companies.

“As a citizen of Massachusetts, I am somewhat ashamed,” Hiatt said. “It is time we honor [low-income workers] with a living wage.”

Yolanda Ostalaza, a low-income worker from Springfield, gave a firsthand account of living on the current minimum wage.

“Being a single mother is hard enough,” Ostalaza said. “Working at minimum wage is impossible to survive.”

According to the Department of Labor website, as of Jan. 1, 2006 Washington state has the highest minimum wage in the country at $7.63.