By Grant Welker
The price of everything from gas and utilities to food and tuition keeps rising, but the minimum wage has not kept up, leading to a new effort to incrementally increase wages and then tie it to inflation in the future.
Now $8 an hour -- one of the highest minimum wages in the country -- the bar would rise to $9 within 60 days of approval, $10 by 2014 and $11 by 2015. Beginning the following year, it would then be tied annually to the Consumer Price Index, assuring it keeps up with the cost of living.
"With loss in wages, you create a situation where it's an injustice," said state Sen. Marc Pacheco, a Taunton Democrat who filed the Senate version of the bill.
A higher minimum wage would generally be good news for workers and not so great for employers, according to those interviewed.
"That would rock," Shannon Lavargna, who works at Sweet Lydia's, a candy store in Merrimack Street in Lowell, said of the potential pay raise. Lavargna, a 19-year-old Tewksbury resident, just finished her freshman year at Southern New Hampshire University, where she is a culinary major. She has a scholarship but must maintain a 3.7 grade-point average.
"All my money gets sucked into having a vehicle to just get to and from work," she said.
On the other side are small-business owners like Franky Descoteaux of the Merrimack Street businesses Humanity Apparel & Furnishings and Mambo Tequila Grill. Descoteaux said she's in favor of workers making enough to cover expenses, but has had to raise prices to offset her own higher costs.
Andy Jacobson, the owner of Brew'd Awakening Coffeehaus on Market Street, said his costs would also go up, which would likely make him increase prices. "The ultimate effect is it's going to hit the customer," he said.
The legislation also has its opponents in industry groups who say it would place too high a burden on retailers and restaurants.
Massachusetts businesses already have high labor costs, especially with so-called blue laws, which require retail workers to be paid time-and-a-half on Sundays, said Jon B. Hurst, president of the Retailers Association of Massachusetts. The group has urged an end to higher Sunday pay.
"Times have changed. Our competition over the border (in New Hampshire) doesn't have to deal with that, and those on the other end of the smartphone -- those online -- don't have to either," he said. Rhode Island also requires time and a half pay.
The Massachusetts Restaurant Association has more strongly opposed one component of legislation that would give significant wage increases to restaurant servers and others who receive tips as a large part of their take-home pay. Now making $2.63 an hour, they would then make 70 percent of minimum wage -- $6.30 at first, and then incrementally more -- if the proposal becomes law.
"It is the most labor-intensive part of our industry," said Stephen Clark, the group's director of government affairs. The pay increase for servers and similar workers is "a big concern for us," he said.
The server base pay has not increased since 1999 despite repeated efforts, Pacheco said, and is the lowest in New England. But servers in the Boston area make a median of nearly $12 an hour, according to the federal Bureau of Labor Statistics, and the restaurant association says Boston area pay is the highest in the country.
Each rise in the minimum wage makes it less affordable to hire workers, "and it's getting far worse with each increase," Hurst, the retailers association president, said. Minimum-wage jobs often go to college students, immigrants, retirees and people working second jobs -- rarely people who need to provide for, say, a family of four, he said.
If workers must all make more money, that makes it less likely some will get jobs, Hurst said. Many union workers, for example, get automatic increases anytime the minimum wage rises because their pay is tied to that pay, he said.
"Let's keep in mind, some people just need jobs," Hurst said. "If we make it unaffordable, those people won't have jobs."
Massachusetts' $8 minimum wage is among the highest in the country. Only Connecticut, the District of Columbia, Illinois, Oregon, Vermont and Washington pay more.
Nevada also has a higher rate when employers do not have to provide health insurance. New Hampshire's minimum wage is $7.25 an hour.
The nonpartisan Massachusetts Budget and Policy Center published research earlier this year that found a higher minimum wage generally benefits an economy. Because the economy is so large, a wage increase wouldn't have a major impact, but the negative aspect of higher costs for employers would be offset by more money in the pockets of many workers, said Noah Berger, the center's president.
Massachusetts does not tie its minimum wage to inflation, so the amount a minimum-wage earner gets today is 24 percent lower than in 1968, when the lowest wages were at their highest relative level, MassBudget said. In the past three decades, minimum wage has fallen compared to inflation in Massachusetts while median wages have risen by 24 percent and the 80th-percentile wages have gone up 41 percent.
Lowell Democrat Eileen Donoghue, the Senate chair of the Joint Committee on Community Development and Small Businesses, said she's yet to decide how she'll vote on minimum-wage legislation. She said she wants to make sure there aren't any unintended consequences, such as layoffs because of increased costs for businesses.
Donoghue said she understands employers' argument that teens are able to make less money than the proposed minimum wage because they typically don't support a family. But Pacheco called it wrong that a segment of the population -- discriminated against, whether by race or gender -- could be made to earn less money.