An Act to Improve the Commonwealth's Economy with a Strong Minimum Wage

Summary

Raises the minimum wage from $8 to $9 an hour sixty days after passage of the bill, to $10 an hour on July 1, 2014, to $11 an hour on July 1, 2015, and beginning in 2016, requires annual minimum wage adjustments based on Consumer Price Index increases for Urban Consumers; articulates in no case shall the minimum wage rate be less than $1.50 higher than the effective federal minimum rate; articulates wages paid out to tipped employees shall be at the rate of 70% of the aforementioned wage rate.

Lead Sponsors

Representative Antonio Cabral

Senator Marc Pacheco

Background

The minimum wage was last raised in January 2008.  580,000 lower wage earners now earning $8 to $12 an hour would benefit from this increase. They’d get $720 million more a year in increased wages. They’d spend it in our economy which would create thousands more jobs.  The large majority of minimum wage earners work for large employers of 100+ employees making good profits. Those earning more than $11 an hour would benefit from the “spill over affect” of the wage floor being raised.

The additional money that low wage earners get through minimum wage increases is spent in the economy.  A 2011 study by the Chicago Federal Reserve Bank showed that every dollar added to the hourly minimum wage resulted in $2,800 in yearly additional consumer spending by that worker’s household. Opponents to raising it  argue this will put too great a strain on employers leading companies to hire less people or lay people off. Economists such as Arindrajit Dube of the University of Massachusetts, Amherst, showed that over a 16-year period, areas that raised the minimum wage did not see more employment loss than comparable areas with lower minimum wages.

Several great studies show the value of raising the minimum wage and argue against the purported cost.  Check out the Demos study on raising wages at WalMart or the Economic Policy Institute’s description minimum wage as stimulus.

Our colleagues at Mass Budget and Policy Center have done an array of analyses on minimum wage right here in Massachusetts.

A poll, conducted March 4-10, 2013 by Greenberg Quinlan Rosner Research on behalf of Small Business Majority, found:

  • More than two thirds of small businesses support increasing the federal minimum wage and indexing it to inflation.
  • 85% of small businesses pay above the minimum wage
  • Two thirds believe increasing he minimum wage will boost consumer demand for small businesses, helping them grow and hire
  • Two thirds agree increasing the minimum wage would decrease the pressure on taxpayer-finance government assistance to make up for low wages

A majority of the poll respondents were Republicans

Current Status

Hearing held on June 11.

Raise up MA is moving to put the issue on the ballot in 2014.  Read more about the campaign.

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