MINIMUM WAGE BATTLE UNDERWAY, WITH BALLOT FIGHT POSSIBLE
By Andy Metzger
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, SEPT. 19, 2017.....A debate over adequate worker compensation that was waged before a legislative committee Tuesday and could be headed to the ballot next November has pitted two struggling groups against one another.
On one side, workers earning the $11 an hour minimum wage spoke about living in poverty while holding down jobs at successful businesses. On the other side, small business representatives said hiking the minimum wage to $15 over the next four years would be a death knell for retailers already chafing against the high cost of doing business in Massachusetts while competing against tax-free sellers from New Hampshire and the internet.
If legislation (S 1004/H 2365) co-sponsored by nearly half the Legislature goes into effect, then retailers, who are required to pay workers 50 percent extra on Sundays, would owe employees at least $22.50 per hour on the prime shopping day.
Sen. Cindy Friedman (left) has taken up the minimum wage cause championed by her predecessor, the late Sen. Ken Donnelly. Rep. Dan Donahue (right) co-sponsors the bill to raise the minimum hourly wage to $15 by 2021. [Photo: Sam Doran/SHNS]
"There will not be a store in Massachusetts open on Sundays," Retailers Association of Massachusetts President Jon Hurst told the Committee on Labor and Workforce Development. He said, "We'll all be ordering our groceries to our front door from Whole Foods."
Barbara Fisher, a 28-year-old Hyde Park resident, said she has raised her two children in shelters and just now qualified for a subsidized apartment after working for six years in the fast food industry.
"I have no diploma and have only been able to get hired at fast food restaurants," said Fisher, who said both her parents had died by the time she turned 18 and she took time off from high school to care for her sick father.
Fisher, who works at Dunkin Donuts, said the only raises she has received while working in fast food were the government-mandated ones when minimum wage increases went into effect. She told the committee, "You will be the line between survival and not being able to survive for me."
The Raise Up Massachusetts coalition, which pressured lawmakers to increase the wage floor in 2014, is threatening to go to the ballot next year with a $15 minimum wage if lawmakers do not pass a bill to its liking.
The coalition is backing bills filed by the late Sen. Ken Donnelly and Rep. Dan Donahue that would raise the minimum hourly wage to $15 by 2021 and then link it to inflation. Under the legislation, the minimum wage for tipped employees would increase from its current rate of $3.75 per hour to $15.75 per hour over the course of eight years, and supporters said the bill would mean a pay bump for 1.1 million people around the state.
Chris Carlozzi, state director of the National Federation of Independent Business, warned that raising the minimum wage would lead employers to shed jobs, give them "less flexibility" in offering compensation to employees, and cause "higher consumer prices for products."
"There's a lot of warning signals out there," said Hurst, who said in 2016 the retailers association had the largest reduction in membership in his 27-year tenure, and that is generally because those former members closed their doors.
Retailers are considering whether to move ahead on 2018 ballot questions to lower the sales tax to 4.5 percent or 5 percent and institute a permanent sales tax holiday.
The minimum wage in January rose to $11, the last of three one-dollar increases required under the 2014 law. A worker making $11 per hour working 40 hours a week year-round would make just under $23,000, which is just above the federal poverty level for a family of three.
Massachusetts housing costs are among the highest in the nation. The average monthly cost of a Boston apartment lease was $2,038, the Boston Globe reported earlier this year. That is more than the monthly paycheck of someone working fulltime at minimum wage.
Rents are significantly cheaper outside of Metro Boston. According to the website RentJungle.com, two-bedroom apartments in Springfield cost an average of $1,090 per month, two-bedrooms in Worcester cost $1,377 and two-bedrooms in Boston cost $3,149.
In 2015, lawmakers and Gov. Charlie Baker increased the earned income tax credit to provide more of a cushion to low-income workers.
"We're stuck with living check to check, hand to mouth every day," said Norwood resident Darius Cephas, 26, who said even with income from his job at Chipotle, his grandmother and wife, he "still can't make ends meet."
Analyzing 2014 data, the Brookings Institute found Boston had a greater income divide between rich and poor than any other city in the country. The information used in that study dates back to when the Bay State's minimum wage was $8 per hour. The second most unequal city was New Orleans, whose minimum wage is $7.25 per hour – same as the federal minimum wage.
In 2016, the number of Massachusetts residents living in poverty fell to 686,597 people and median household income rose to $75,297 a year, according to the Census Bureau.
The Bay State's August unemployment rate of 4.4 percent was slightly below the national rate, and Donahue said that as the state's minimum wage ticked up the past three years, the state added more than 150,000 jobs.
SHNS Video: Advocates rally behind $15 minimum wage
The minimum wage bill has the support of major unions, as well as the liberal Alliance for Business Leadership, a Boston-based group called Business for a Fair Minimum Wage, and Ali Fong, a co-founder of the restaurant chain Bon Me, who said the company raised its wage floor to $13 per hour and the goal is to get that to $15 per hour by the end of 2018.
"The raise last year cut our profit margin in half. We are not sure we can get to $15 on our own in the current competitive environment," said Fong, asking lawmakers to lift wages for the lowest paid workers throughout the state.
Rep. Joseph McKenna, a Webster Republican and member of the Labor Committee, said he favors companies making their own decision to increase wages and said it sounded as though Fong wants other employers to financially support her business decision.
"That doesn't work with me," McKenna told her.
The bill filed by Donnelly and Donahue has been co-sponsored by 22 senators and 70 representatives, or a little more than half of the Senate and just under half of the House, according to Raise Up. No Republicans have signed on as co-sponsors.
Sen. Cindy Friedman, an Arlington Democrat who was an aide to her late predecessor, has taken up Donnelly's mantle on the minimum wage bill.
"I decided to run for this office because I felt that it was time to step up in this era of discontent and turmoil and fear," Friedman told reporters ahead of the hearing. "This is my first time before all these cameras. I am way out of my comfort zone. I've got a headache. I'm dizzy. I'm nauseous. And when I look at you I remember why I'm doing it."
Friedman told the committee that nearly two thirds of minimum wage earners work fulltime and she said the extra cash paid to workers, under the bill, would "stimulate the economy."
IMPACTS ON WOMEN
Congressman James McGovern, a Worcester Democrat, who was in Boston to speak to the New England Council on Tuesday, said he supports the push to raise the minimum wage through the 2018 ballot.
"I think we need to find ways to make sure that work pays, and pays enough so that people don't need to rely on public assistance, don't need to rely on government to afford food, so I would favor the ballot initiative and whatever comes out of the state Legislature," McGovern told the News Service.
Tuesday's hearing was held before a packed Gardner Auditorium, where supporters of the hike outnumbered opponents and occasionally booed and hissed when people spoke out against the idea – drawing reprimands from a court officer.
Sen. Patricia Jehlen, a Somerville Democrat, said most wait staff who rely on tips don't work at high-end restaurants, most of them are women, and many are living in poverty. Seven states have eliminated a separate and lower minimum wage for tipped workers and they have all seen "growth in restaurant business," Jehlen said.
"I can say first-hand that tipped workers are subject to so much more wage theft, sexual harassment and gender discrimination than people who make a livable wage," said Marie Billiel, a 28-year-old Allston resident who now manages Luna Café in Cambridge after working as a server at Route 9 Diner in Hadley and Uncommon Grounds in Watertown. "Because we are required to live almost solely off of the whims of our customers, we have to put up with anything that they might send our way – sexual harassment, catcalling, groping."
SHNS Audio: Labor and Workforce Development Committee hearing
Businesses fear that adding to employee paychecks could put them at a disadvantage to out-of-state competitors, and companies are already burdened with high health care and energy costs by doing business in Massachusetts.
"For Massachusetts companies, especially many small business owners, they cannot afford to pay higher wages and continue to hire new employees because of state mandated cost continuing to rise," Associated Industries of Massachusetts wrote to Rep. Paul Brodeur and Sen. Jason Lewis, the co-chairmen of the committee. Another hike in the minimum wage would have the "perverse effect of limiting opportunity for young and lower-skilled workers and pushing jobs out of the market," Bradley MacDougall, AIM's vice president for government affairs, told the committee chairmen.
House Speaker Robert DeLeo recently assured business leaders that he would listen to their perspective on major issues before the Legislature.
"As legislators, we seek to expand the rights for our residents and to protect freedoms. But we are also very mindful of the impact that changes might make on our employers, which we always remember are our economic engine," DeLeo told the AIM Executive Forum last week.
Lewis on Tuesday told business representatives that lawmakers are "deeply concerned" about the challenges that retailers are facing.
The first priority this year for the Democrats in charge of the House and Senate was to give themselves and their colleagues a raise along with salary increases for statewide elected officials and judicial officers.
Rep. Kevin Kuros, an Uxbridge Republican, pitched the committee on his bill (H 1021) to create an "opportunity wage" for youths that is 20 percent below the regular minimum wage.
Kuros, who said his first job was at an amusement park in Pennsylvania, said he is concerned that the higher cost of employing people has dissuaded businesses from hiring teenagers.
"I'm speaking on behalf of teens who couldn't find that first job," said Kuros, who said his proposal is not "politically popular."
McKenna said his first job was picking up golf balls at a driving range, a task that he said was not worth more than minimum wage but one that has benefitted him throughout his working life.
"That taught me work integrity and work ethic," McKenna said.
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