Car dealer Ernie Boch Jr. will raise hourly wages
Hikes minimum rate for his employees; announces decision as Obama visits area
Car dealer Ernie Boch Jr. had a message for President Obama to read when he arrived in Boston on Wednesday. Boch isn’t waiting for the government to raise the minimum wage.
“President Obama: I did it!” he wrote in a signed, full-page ad that appeared in Wednesday’s Boston Globe. Boch, a Republican who has supported political candidates from both parties, said he will raise the pay of his minimum wage workers to $10.10 on April 1.
“I believe that, even above minimum wage, it’s extremely difficult to make a living, especially with a family and expenses,” Boch said in an interview Tuesday. “I’m doing what I think is the right thing, which is what Obama is proposing. I’m doing my part.”
The change will affect more than 80 of Boch’s 819 employees, most of whom are sales people who earn a minimum wage hourly rate and an additional commission for every car they sell. He said roughly 30 of his workers are strictly paid minimum wage.
The minimum wage is a hot-button topic under debate in Washington and many states across the country. The president is promoting a Democratic proposal to increase the federal minimum wage from $7.25 to $10.10 per hour by 2016. Massachusetts legislators are also discussing a possible increase in the state minimum wage, currently $8 per hour.
The Boch newspaper ad appeared as Obama was scheduled to make fund-raising visits to Cambridge and Boston late Wednesday. Earlier in the day, the president was expected to speak in Connecticut on the minimum wage issue.
In the ad, Boch said he wanted to “strongly encourage” other New England businesses to join him and support “this new living wage.”
Boch has offered his financial support in the past to a range of political candidates, from John Kerry to George W. Bush. He said his decision on the minimum wage wasn’t purposely timed with the arrival of Air Force One in Massachusetts.
The Norwood resident said he saw Obama on television as he made coffee Tuesday morning and mistakenly believed the president was in Boston that day. The image triggered thoughts of a minimum wage increase Boch had been mulling over for months, and he decided to act.
“I thought, ‘He had this great idea and I’m going to do it,’ ” Boch said. “I don’t always agree with Mr. Obama, but in this particular case I do.”
Boch isn’t the first or the largest employer to raise the minimum hourly rate of his workers. In February, Gap Inc. of San Francisco bumped up its minimum pay scale to $9 in 2014 and $10 in 2015.
The change was expected to affect some 65,000 US employees.
Other companies, such as Chipotle Mexican Grill of Denver, have gone on record saying a wage hike would not have a significant impact on their bottom line.
The minimum wage debate is generally split along partisan lines. Democrats mostly support a pay hike and say it will reduce poverty. Republicans contest the idea and believe it will hurt jobs. Economists see some merit in each view.
“The impacts would be fairly modest,” said Paul Edelstein, a US economist with IHS Global Insight of Lexington. “It will raise the wages for some people. But there are negative unintended consequences, and some minimum wage workers might be laid off.”
A recent report from the nonpartisan Congressional Budget Office analyzing an increase in the federal minimum wage to $10.10 per hour came to a similar conclusion. It said the proposal could increase the incomes of 16.5 million low-wage workers in a typical week and lift 900,000 families out of poverty.
On the other hand, the report also said the minimum wage boost could cut US employment by 500,000 workers by the second half of 2016.
In Massachusetts, the Senate approved a bill to raise the state’s minimum wage from $8 an hour to $11 an hour by 2016. The bill, which would also link future wage increases and inflation, has not been put to a vote in the House.
Much of the public debate in Massachusetts has linked an increase in the minimum wage to reforms of the state’s unemployment insurance system, a point of keen interest to many businesses.