Deliberation Needed on Minimum Wage
In 2006, the state Legislature enacted a two-step increase in the minimum wage, raising it to $8 per hour by January 2008. At the time, that rate was the second-highest in the country, behind Washington state and tied with California. Just about each year since then, the issue of increasing the minimum wage comes up for debate on Beacon Hill, and this year was no different.
On the second-to-last day of the 2013 legislative session, the Senate passed a bill increasing the rate in three steps to $11 per hour while tying additional increases to inflation. The Affiliated Chambers of Commerce of Greater Springfield (ACCGS) advocated that the Senate move its vote until the new year for several reasons, not the least of which was the timing of the vote so late in the session, giving amendments to the bill very little attention and time for debate, and the House virtually no chance to debate either the bill or its amendments until the new year.
The ACCGS expects the issue to come to a head early in the coming year. We suspect the rate will be increased, as the debate seems more focused on what the rate will be rather than if the rate will be higher and whether or not it will be tied to an inflation-linked index, and how this acknowledged increase in the cost of doing business will be offset by decreases in other business costs.
Even the term ‘minimum wage’ is being debated. There are some in the Legislature who would prefer the rate be increased even higher than the Senate’s suggested $11 per hour, noting that it would be a ‘living wage,’ and there are those who would like to see a more moderate and reasoned approach for a ‘starting wage.’
Whatever the term, a wage is a wage, and wages constitute one of a company’s largest operating costs. As such, the ACCGS believes more debate and deliberation is needed on this issue, and is calling for a very careful and detailed look at any request for an increase.
A recent survey of chamber members showed that more than 80% of the respondents already pay above the state and federal minimum wage, with more than half paying an hourly rate of $10 or more. More than 80% said an increase in the minimum wage was somewhat or very important to them, noting their very real concern that a large increase would cause upward pressure on all wages. Many of the businesses went so far as to acknowledge that other steps would need to be taken in their individual businesses to offset that pressure.
The ACCGS recognizes that more than 10 other states have increased their minimum wage rate this year, but believes that none have taken it to the levels the Massachusetts Senate did. We know there are studies as to the pros and cons of an increase and the impact it has on the economy and on jobs, and our own survey results show there will be an impact. With an unemployment rate in our region that is almost 50% higher than the state in general, actions that could inhibit job creation must be scrutinized.
As the House moves its debate forward, the chamber will advocate with representatives for moderation in any increase in the minimum wage, recognizing what negative impacts could occur, while at the same time, the chamber will call for a linked action to reductions in other costs of doing business, such as the unemployment-insurance tax. Like the minimum wage, where this state ranks among the highest in the U.S., the same holds true for the cost of unemployment insurance. The chamber firmly believes we should all work collectively and collaboratively at reducing the costs of owning and operating a business in the Commonwealth to enable job creation, reduce unemployment, and improve the overall economy of the region.
Jeffrey S. Ciuffreda is president of the Affiliated Chambers of Commerce of Greater Springfield.