Massachusetts maxes out on minimum wage, but is $11 enough?

Gov. Deval Patrick puts his John Hancock to the legislation, Massachusetts will have the highest state minimum wage in the country. By 2017, minimum wage workers can look forward to earning $11 an hour. Ten other states have raised their minimum wages above the current federal minimum of $7.25 an hour.

Raise Up Massachusetts, the advocacy group that campaigned for higher wages and had gained enough signatures for a ballot question, declared victory and plans to fold up shop.

But there is a caveat in the fine print: the increase is not indexed to inflation. The House nixed the Senate’s indexing provision. During discussions in the House regarding the increase, Rep. Geoff Diehl, a Whitman Republican, declared, “Indexing anything to inflation would be a mistake…I want to remind everyone that small businesses make up 80 percent of our economy and they may start taking losses.”

 

Yet as prices rise, employees’ wages will not keep pace and, more likely than not, advocates for low-wage workers will be right back at it in a few years, arguing that $11 an hour is not keeping up with the cost of living.

There is a related quandary: Is an $11 minimum wage the magic number for Massachusetts? Brookings Institution economist Arindrajit Dube thinks not. Calling his proposal a “thoughtful minimum wage,” Dube suggests that a “median-adjusted target minimum” would enable more workers to move out of poverty.

Using Dube’s calculations, the Bay State minimum wage would increase from the current $8 an hour, and beyond $11 an hour, to $12.45 an hour. His approach would also index the state minimum wage to the regional consumer price index. Such a move “eliminates the need for revisiting a contentious policy issue year after year,” he says.

The Massachusetts Budget and Policy Center  notes in a mid-May policy brief that two of the three proposals that the Legislature considered indexed the minimum wage, which was a good thing. Mass Budget explained that prior to the start of indexing… (i.e., during the phase-in period), inflation will gradually reduce the real value of the stepped wage increases, even as they occur.” In other words, by the time the Massachusetts minimum wage peaks at $11 in 2017, workers will already be earning less.

Even so, there is an upside, particularly for low-wage workers outside Greater Boston. In a new policy brief, Mass Budget concludes that the increase will have a significant impact in regions of the state where there are large numbers of low-wage workers.

Predictably, there’s a split on whether the $11 an hour wage is good for the state economy.   Opponents echo Rep. Diehl’s warnings that an exodus of businesses fleeing to lower wage states will produce higher unemployment.

The Gloucester Times underlines these fears: “If setting wages by force of law is good and more money per hour is better than less money per hour, why stop at $11 per hour? Why not set the minimum wage at $15 per hour or even $20? Why not go for broke and make it $25?” Likewise, the Boston Business Journal asks, “How are employers going to pay for it?”

Supporters such as The Hampshire Gazette take a different view: “Even if raising the state’s minimum wage causes some employers not to fill openings, lawmakers had an obligation to their lowest-income constituents to move the needle on pay.”

–GABRIELLE GURLEY  

CASINOS

The Supreme Judicial Court says Attorney General Martha Coakley erred in rejecting an initiative petition for a vote on casinos and ordered the referendum to be placed on the ballot in November.

Boston extends its talks on a surrounding community agreement with Wynn Enterprises until Wednesday and until Friday with Mohegan Sun, the Associated Press reports.

BEACON HILL

A pair of lawmakers testified in the federal corruption trial of former Probation officials that in 2007 they got calls out of the blue from then-House Ways and Means Chairman Robert DeLeo, who had his eye on the speaker’s chair, offering them probation jobs to hand out to supporters. The sitting state reps also said support from leadership was essential in securing patronage jobs at the department, CommonWealt reports.  Broadside on NECN tries to sort out the legal, political, and moral issues involved with the Probation trial.

With a new minimum wage law nearing approval, a group advocating for a ballot question on the matter withdraws the measure, the Associated Press reports.

MUNICIPAL MATTERS

A federal appeals court refuses to block Worcester’s anti-panhandling statute while a court case on the matter proceeds. The statute affects panhandling in traffic by the homeless as well as nonprofit groups raising money for causes, the Telegram & Gazette reports.

Methuen is unsure how two rulings by Attorney General Martha Coakley on medical marijuana dispensaries affect the municipality’s ban on them, the Eagle-Tribune reports.

NATIONAL POLITICS/WASHINGTON

New Jersey Gov. Chris Christie is facing an SEC investigation into a $1.8 billion road project he paid for with Port Authority funds. The New York Times has previously reported that Christie tapped the funds, which were originally earmarked for a rail tunnel, as a way of staving off a gas tax increase.

Aaron Goldstein of the American Spectator leans on lessons from The Lone Ranger to draw support for retaining the Washington Redskins name. “If redskin was the equivalent of the N-word then why wouldn’t Tonto punch the jaw of the person who uttered it?” he writes. Um, because it was a 1950s television show?

BUSINESS/ECONOMY

The Market Basket board ousts Arthur DeMoulas and two top lieutenants and replaces them with two consultants to the company, the Eagle-Tribune reports.

Put Keller@Large down as a “no” on the Olympics here in Boston, comparing the games to the Big Dig and the busing decision and labeling the backers “myopic elites.” But, he says, they mean well. Keller isn’t the only one opposed.

The housing market around the state continues to rebound but some hard-hit areas, such as Fall River and surrounding towns, continue to struggle.

A federal judge rejected a motion by the IRS to dismiss a lawsuit seeking to force the agency to change how it releases nonprofit tax filings.

EDUCATION

Colleen Considine, a first grade teacher at the Lee Academy Pilot School in Dorchester, says we have nothing to fear from the Common Core standards.

A majority of the faculty at Boston Latin Academy claim bias against minority and older teachers, according to a letter obtained by The Boston Globe.

The Blueprint Schools Network gains approval to extend the school day and year for some teachers at Bentley Elementary School in Salem, the Salem News reports.

Twenty-three states are out of compliance with federal special education requirements. Massachusetts, New Hampshire, and Vermont are in good shape, but Maine, Connecticut, and Rhode Island need help.

HEALTH CARE

State Treasurer Steven Grossman called on his gubernatorial rival Attorney General Martha Coakley to release details of her office’s negotiations with Partners Healthcare over the planned merger with South Shore Hospital.

TRANSPORTATION

The Lowell Sun has a somewhat confusing story on immigration detainees being brought in and out of Massachusetts via Hanscom Field and Logan International Airport.

The deputy manager for Keolis sits down with Greater Boston to talk about the French company’s impending takeover of the MBTA’s commuter rail operation next week.

An Amtrak train from Washington bound for Boston struck an SUV that was driving on the tracks in Mansfield, killing three people and disrupting Amtrak and commuter rail service.

Middle schoolers may be old enough to ride the MBTA, but is the MBTA ready for them?

ENERGY/ENVIRONMENT

In a case stemming from a suit by Massachusetts, the Supreme Court largely upheld the EPA‘s power to regulate greenhouse gases within limits.

CRIMINAL JUSTICE

Michael McLaughlin , the former head of the Chelsea Housing Authority who is currently serving time in jail, pleads guilty to a series of campaign finance violations, the Associated Press reports.

Meet the Author

Gabrielle Gurley

Senior Associate Editor, CommonWealth

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

About Gabrielle Gurley

Gabrielle covers several beats, including mass transit, municipal government, child welfare, and energy and the environment. Her recent articles have explored municipal hiring practices in Pittsfield, public defender pay, and medical marijuana, and she has won several national journalism awards for her work. Prior to coming to CommonWealth in 2005, Gabrielle wrote for the State House News Service, The Boston Globe, and other publications. She launched her media career in broadcast journalism with C-SPAN in Washington, DC. The Philadelphia native holds degrees from Boston College and Georgetown University.

MEDIA

The New York and Chicago public libraries win news challenge grants from the Knight Foundation, the Nieman Journalism Lab reports.