Many American workers are overdue for a raise these days. For the 800,000 or so in Massachusetts who make at or close to minimum wage, however, it’s been a full five years since they’ve seen their wages go up. Many higher-paid employees haven’t fared much better, but now that the economy is stabilizing, it’s reasonable to consider raising the state minimum wage.
The minimum wage in Massachusetts has been $8 per hour, or $16,704 annually, since 2008, not even keeping up with inflation. Public initiatives such as food stamps and the earned income tax credit can offset that stagnation to some extent. Still, it’s undeniable that the buying power of the minimum wage has eroded over time. In 1968, the state’s minimum wage was $10.58 in 2012 dollars. Today, it’s 24 percent less.
State lawmakers began debate last week on a proposal to gradually hike the minimum wage to $11 by 2015, then index future increases to inflation. (Nine other states peg the minimum wage to inflation.) A $3 bump, however, is a steep hit to small business owners’ labor costs.
Ten dollars by 2015 would be a good compromise. Consider that, in his 2013 State of the Union, President Obama called for raising the federal minimum wage — which all states must abide by — from $7.25 to $9. Given Massachusetts has one of the country’s highest costs of living, it makes sense the state should have a higher minimum wage.
It would also be fair to employers to exclude teenage workers from this latest raise. Teens earn valuable experience of summer jobs and internships, and several other states — including Rhode Island — have created a separate minimum wage for them. State Representative Dan Winslow offers a reasonable amendment that would set the floor for pay for seasonal employees under age 20, who work five months or less, at $6.
It’s undeniable that the buying power of the minimum wage has eroded over time.
The jury is still out on whether increasing the minimum will cause many employers to pare back hiring. But there are indications that raising wages actually reduces turnover by improving morale. That saves employers hiring and training costs. And for Massachusetts workers struggling to make ends meet, any raise will surely help to provide greater peace of mind.