Massachusetts lawmakers are on the brink of approving the highest minimum wage of any state in the nation.
The state Senate voted overwhelmingly Thursday to increase the minimum wage from $8 to $11 per hour by 2017. The House of Representatives is expected to approve the legislation next week, and Governor Deval Patrick has signaled he will sign it.
“I think it’s a question of fairness,” Senate President Therese Murray said in an interview after the vote. “When people work 30, 40 hours a week and they’re making $8 an hour, that’s not making it in Massachusetts.”
The minimum wage push comes amid growing national concern about stagnant wages and growing income inequality.
President Obama has backed a $10.10 federal minimum wage. But with little movement on that plan in Congress, states from New Jersey to California have pushed through their own increases in recent months.
The pending bill is ‘a strong statement in support of low-wage workers.’
A handful of cities have taken particularly aggressive action. The Seattle City Council approved a $15 minimum wage earlier this month, surpassing any state minimum wage. And this week, Mayor Ed Lee of San Francisco proposed a $15 minimum wage.
The state Senate’s 35-to-4 vote came one day after House and Senate negotiators agreed on a compromise measure in the conference committee. The original Senate bill called for an $11 minimum wage, with future increases pegged to inflation. The House plan included a $10.50 minimum wage and did not index to inflation.
State Representative Tom Conroy, a Wayland Democrat who served on the conference committee, said House negotiators agreed to higher minimum wage in exchange for no indexing. “Each side got half a loaf,” he said.
The bill, in a nod to business, also includes unemployment insurance reform, including a three-year rate freeze for employers.
Conroy, echoing several other House lawmakers, said the prospects for passage in that chamber next week are good, predicting a vast majority of representatives will support the legislation.
Governor Patrick did not take a position on the bill Thursday night, but he has signaled repeatedly that he will support a hike.
Advocates for minimum wage increases were generally pleased with the compromise legislation.
“Establishing an $11 per hour minimum wage will raise the wages of a half-million people in Massachusetts, which will be very important to those working people and their families and will also have a positive impact on the state economy,” said Noah Berger, president of the left-leaning Massachusetts Budget and Policy Center.
But Berger said he was disappointed that the bill made only a modest hike in the minimum wage for tipped workers, from $2.63 per hour to $3.75.
The failure to index future wage increases to inflation was also a concern. Without automatic increases, Berger said, the value of the minimum wage will erode shortly after it hits the $11 peak in 2017.
The advocacy group Raise Up Massachusetts — a coalition of labor, community and religious organizations — has been gathering signatures for a November ballot measure that would raise the minimum wage to $10.50 and index it to inflation.
Steve Crawford, a spokesman for the group, said the bill moving through the Legislature is “a strong statement in support of low-wage workers.”
But he said Raise Up will continue collecting signatures and review the legislation, if and when it passes, before deciding whether to pull the plug on the ballot measure.
The bill approved in the Senate would raise the minimum wage to $9 on Jan. 1, 2015; $10 the following year; and $11 on Jan. 1, 2017.
Jon Hurst, president of the Retail Association of Massachusetts, said the 38 percent hike over three years “is a bit shocking” and predicted it would lead to job loss and even the closure of small businesses.
“We may look back on this day when we have a lot of dark stores on the 351 Main Streets in Massachusetts and say, ‘Why didn’t we take the concerns of small business more seriously?’”
Economists are divided on whether raising the minimum wage leads to job loss. But most agree on another sticking point in the debate: Increasing the minimum wage is not a particularly efficient antipoverty strategy.
Census data crunched for The Boston Globe by the left-leaning Economic Policy Institute, based in Washington, shows that almost two-thirds of Massachusetts residents who will benefit from a hike in the minimum wage to $11 per hour are in households earning a combined $40,000 or more.
David Neumark, an economist at the University of California-Irvine, called a minimum wage increase “a very strange” way of addressing income inequality.
“It doesn’t give to the poorest, and it doesn’t take from the richest,” he said, noting that small business owners bear the brunt of a hike.
But David Cooper, a senior economic analyst with the Economic Policy Institute, said the private sector should bear some responsibility for improving the lot of workers.
And he said a minimum wage hike should be just one component of a broader antipoverty strategy, including more targeted benefits like the earned income tax credit, a direct payout to low-wage working families.