Jessica Rinaldi/Globe Staff
Supporters of a statewide $15 hourly minimum wage packed a State House hearing Tuesday afternoon, testifying that a pay hike would not only help workers support their families, but would stimulate the local economy by giving workers more money to spend.
Business groups that oppose the wage hike said that such a significant increase could be devastating to businesses around the state, which are facing a number of rising costs, including a series of wage hikes that increased the statewide minimum to $11 earlier this year.
The bills, in the House and Senate, would increase the minimum wage by $1 a year over the course of four years, reaching $15 by 2021, and would also increase the tipped minimum wage, currently $3.75, to the same amount over the course of eight years. After it reaches $15, the minimum wage would be adjusted every year to rise at the cost of living rate.
Two states, California and New York, have approved a $15 minimum wage, along with Washington D.C., and about two dozen cities across the country. A number of states are also considering raising their minimum wage to $15, including Vermont and Rhode Island.
“Ensuring our workers are able to earn a living wage is good for our economy, good for our businesses, and most importantly, it is the right thing to do for the hard-working residents of the Commonwealth,” state Senator Cindy Friedman, who assumed the role of lead sponsor after the death of state Senator Kenneth Donnelly. The hearing was held by the Joint Committee on Labor and Workforce Development.
The hike would raise wages for more than 1 million workers in Massachusetts, about a third of the state’s workforce, the majority of whom are adults working full time, according to the Economic Policy Institute. At the current rate of $11 an hour, a full-time minimum wage worker makes less than $23,000 a year.
The bills are backed by more than 90 lawmakers, but if the legislature does not act, the wage increase would likely be put before voters next year, where it is widely expected to pass. Every time a minimum wage increase is on the ballot it passes, said David Cooper, an economic analyst at the Economic Policy Institute, who testified in favor of the boost to $15.
Raise Up Massachusetts, the coalition of labor, community, and religious organizations pushing the wage increase, has already started collecting signatures to put the measure on the ballot.
A group of more than 200 Massachusetts business leaders have come out in support of a $15 minimum wage, including Michael Kanter, co-owner of the health store Cambridge Naturals. Kanter raised his store’s base wage to $15 in December, and said that he has already recouped the $40,000 it cost him through increased productivity, worker retention, and record sales. Kanter marketed the pay raise to his customers, and they responded, he said: “That gained us a lot of kudos.”
But this type of pay raise shouldn’t be forced on all businesses, said Christopher Carlozzi, state director of the National Federation of Independent Business. “Massachusetts employers are still absorbing the cost of the final tier of the most recent minimum wage increase,” he testified. “An increase to $15 would make Massachusetts a national outlier.”
Retailers in particular would also be hit hard by this increase, said Jon Hurst, president of the Retailers Association of Massachusetts. In addition to footing the bill for paid sick time and rising health care and energy costs, retailers in Massachusetts have to pay workers time and a half on Sundays and holidays. Competition from Internet sales are also cutting into profits.
“Their sales are flat because of this,” Hurst said, holding up his smart phone, “but their costs are going through the roof.”
At a briefing before the hearing, Dayail Gethers, a wheelchair attendant at Logan Airport, said a pay increase would allow her to work less and spend more time with her family. Earning $11 an hour, “I spend more than half my paycheck on rent,” she said.
Steven Trulli, a hardware store owner in Melrose, testified in favor of another minimum wage bill under consideration: a modified wage for teens that would allow employers to pay young workers less. Trulli, who employs a number of high school students, said the $3 increase to the minimum wage over the past three years has increased his payroll by $47,000 a year, and an additional $4 increase for all his workers would be impossible to overcome. “This would absolutely put us out of business,” he said.
Ninety economists around the state have come out in support of a $15 minimum wage, noting in a statement issued by Raise Up Massachusetts that “careful studies have found that when the minimum wage is increased in reasonable increments, businesses appear able to adjust with only small — or no — effects on employment opportunities.”
But a recent study of Seattle’s minimum wage increase found a significant reduction in hours worked by low-wage earners. Minimum wage experts, though, questioned the researchers’ methods, saying they hadn’t accounted for the effects of a hot job market, where higher-wage jobs replace low-wage work.
A number of cities and counties have rolled back minimum wage increases recently. In March, the mayor of Baltimore vetoed a plan passed by the City Council to nearly double the minimum wage from $8.75 to $15 an hour, saying that the increase would put the city at a competitive disadvantage. But it may not matter. Maryland’s minimum wage is rising to $10.10 next year, and the state is considering boosting it to $15.
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