A non-indexed wage is a *shrinking* wage. A wage that does not keep up with inflation is a wage that’s going down. That’s why economists refer to “real” dollars (ie. inflation-adjusted) and “nominal dollars” (ie. the number amount) over time. This is not mysterious. It’s literally Econ 101. Compound interest makes the world go round.
Our thoroughly Democratic, allegedly “progressive” legislature just passed a minimum wage hike to $11 over two years. And after that — nothing. It will not keep up with inflation unless the legislature decides to grapple with it every year, which they won’t, because they don’t. They pass the bill and wash their hands of the issue — usually for quite a while.
I’m amazed that indexing is this wild and wooly idea in our legislature. In not acknowledging this rather unremarkable bit of reality, our legislature condemns working people to a shrinking wage leading up to, and after, the eventual hike thirty months hence.
Slow clap for everyone.
jconway says
Particularly if this guy has been proposing it for years.
fenway49 says
And I’m chagrined to see the conference committee’s final bill apparently does not. The ballot question provides for indexing but we’re still awaiting a final decision on whether it will go forward. It will be a tough sell since it seeks only $10.50, not $11.
Unfortunate, but $11 in and of itself is progress.
afertig says
How long does $11/hr minimum wage take to become less than $10.50/hr in real value? Or is that the wrong way to think about it?
stomv says
Year 0: $10.50
Year 1: $10.71
Year 2: $10.92
Year 3: $11.14
SomervilleTom says
In my view, the bill as proposed is not good enough.
I’d like to see the proponents put the referendum on the ballot. I’m confident that Massachusetts voters will pass it — and send a message to our “Democratic” legislature that we expect more.
In a perfect world, the “tipped minimum wage” would be eliminated — that’s a question for the next election, I guess.
Al says
not to have a vote for a tax pinned on them, no matter the reason, and not to get a vote for a regulation pinned on them.
jconway says
We clearly voted to keep the income tax, voted for a Governor who promised tax equity, and we obviously elected a Senator convinced that $22/hr would be the ideal minimum wage. This is ridiculous, and maybe it’s incumbent on us and ProgressiveMA to find out who the fence sitters are and tell them we have their backs. Perhaps Judy Meredith, or other more familiar with the lay of the land can give us the names and numbers.
Christopher says
How is a vote to increase the minimum wage a tax on anyone? Even as a regulation it does much more good than harm.
fenway49 says
It indexes and does better by tipped workers. If they wait another 6-7 years to raise it, an indexed 10.50 will beat an unindexed 11.00. And it would boost Democratic turnout. But that is too complicated for an electorate that would be told we are bringing the minimum wage down via the ballot question.
matthewjshochat says
Although we got an amendment on the tipped minimum wage, it was not voted on.
Also this.
harmonywho says
I’m trying to figure out…
Who wins by NOT indexing it?
Is it just the business lobby?
Or is it the legislature itself… because they want to keep “We raised the minimum wage! Again! (But we didn’t fix it in such a way that it keeps its value!)” as a campaign issue, and they know the general voter will just take their word for it?
Shit like this makes me cynical.
Hooray for the increase. Boo for pretending like this is the best they could do. It wasn’t. And I’m sorry we didn’t see more of a fight — when it was in play (it’s not any more) — from legislators to whom I’ve given time and money.
That’s politics and realpolitik. I guess.
Hey by the way, when the minimum wage reaches its full increase, $11, IN TWO AND A HALF YEARS FROM NOW, the wage will be worth $10.40.
Less than what it would be than the #RaiseUpMA proposal .
I can tell you this: MY community of local Needham activists worked hard BECAUSE of the indexing clause in #RaiseUpMA. To JUST raise the minimum wage? That was ALWAYS going to happen. They were never going to NOT raise it–it was just a matter of when. Blech.
But hey we got sick time on the ballot.
harmonywho says
Asking grassroots to invest sweat and time into an issue which is the first item to drop in a “compromise” .. this is the kind of thing that breeds cynicism amongst the peeps.