The Associated Press’ Glen Johnson is reporting that legislative negotiators have agreed to raise the state’s minimum wage to $8.00 by January 1, 2008:
Under the proposal, which was later approved by the full Senate, the minimum wage in Massachusetts would increase from $6.75 per hour to $7.50 per hour as of Jan. 1, 2007. A year later, it would be increased by another 50 cents, to $8 per hour, which House leaders have said would give the state the third highest minimum wage in the country.
At the end of the day, the increase is the most important thing to families who are struggling to make ends meet. However, I am struck by how incredibly weak-kneed and wishy-washy Kerry Healey emerges from this debate.
Apparently, Healey took the courageous step (read with heavy sarcasm) of coming out in favor of a minimum wage increase just as the legislature was about to announce its decision. Way to use that bully pulpit, Ms. Healey!
Just hours before the deal was announced, Lt. Gov. Kerry Healey said she favored increasing the minimum wage to “somewhere around $8” per hour, but opposed linking future increases to the inflation index — the opposite of the position she and Romney took during their 2002 campaign.
“I think some increase is appropriate; it’s been a long time since we had an increase in the minimum wage,” said Healey, the Republican gubernatorial nominee. “But I do not like the idea of indexing. I think that that creates a very unpredictable business environment, and it would particularly detrimental to small businesses.”
As Johnson points out, there is only one problem with Kerry Healey’s opposition to wage indexing – she and Mitt Romney campaigned on it in 2002.
While Healey campaigned for indexing four years ago, she said Thursday she did not believe in the idea at the time.
“But I believed that the economic package as a whole was good and it was my job to get out there and promote it,” she said. “But now, as a candidate for governor, it’s my job to make it clear to voters where I stand vis a vis the governor on key issues, as I have on abortion, or gay marriage or stem cell research.”
Apparently (or transparently) Kerry Healey read Wayne Woodlief’s column this morning suggesting that she needs to part ways with Mitt Romney and pronto. The problem is that Healey is trying to part ways with her own record of advocacy.
So, Ms. Healey, let us get this straight: you were really against minimum wage indexing when you were campaigning for it? Seriously this time or just *wink wink nudge nudge* kinda sorta serious? Which issue are you not really for this year?
Healey expects us to believe that she was just playing the good soldier when Mitt Romney said, “I do not believe that indexing the minimum wage will cost us jobs. I believe it will help us retain jobs.” Are you sure you weren’t just playing good politics, Ms. Healey?
So, now that the day of reckoning has arrived, where did our own Democratic candidates for Governor stand on this issue at decision-time?
Tom Reilly unequivocably supported raising the minimum wage to $8.25 and linking future increases to inflation.
According to progressivedems.org, Deval Patrick supported raising the minimum wage, but had not formulated a position on indexing. (Patrick: “I am in favor of increasing the minimum wage although I don’t yet have a point of view on indexing.”) I found similar statements by Patrick on the web, but nothing to suggest that he had taken a position.
According to this debate account, Chris Gabrieli supported an increase, but I have not been able to find his position, if any, on indexing. Actually, I couldn’t even find the minimum wage issue on his website.
For those who appreciate clarity, there was at least one clear voice.
…and a minimum-wage increase is long overdue.
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WF
winner!
Check this post at Under the Golden Dome where Deval is quoted as saying:
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“I also support indexing the minimum wage, provided the legislature reviews the matter regularly. I do not believe that a matter as important as the minimum wage should be placed on permanent auto-pilot.”
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Indexing is essentially auto-pilot – inflation rate speeds up, wage increase speeds up; inflation rate slows down, wage increase slows down.
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You can’t say your FOR indexing, with a qualifier, and then say it shouldn’t “be on auto-pilot” whatever that means.
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Deval is trying to play both sides.
Indexing need not be automatic, but rather, the Legislature could vote year-by-year to index or not. Perhaps (giving him benefit of the doubt) that’s what Mr. Patrick was intending.
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p.s. No bias toward any particular candidate here. My opinion: The govenor, lt. gov., candidates and Legislature are making a unanimous mistake and are using the minimum wage bill to pander to the union for votes. If legislators really want to create a ‘living wage,’ the best thing they can do is eliminate, not increase, the minimum wage.
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See Beaconhill.org pdf on the Economics of a Higher Minimum Wage in Massachusetts.
I doubt there was much “pandering” here, especially considering the unions did not get the bill they wanted, and DiMasi pretty clearly put Haynes in his place when his union threatened to withhold endorsements (shorter DiMasi: “Who cares? What are you going to do — endorse Republicans?”).
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You comment about eliminating the minimum wage as the best way to a “living wage” makes little sense. Do you think wages would go UP if it’s eliminated? I don’t see how that is possible, considering that if true, they would go up regardless of a minimum floor.
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As far as the Beacon Hill study goes, that’s great — show me some real raw data of job losses from other states raising the minimum wage, rather than economists’ endless speculations and “calculations”.
there have been studies done, such as the Center for American Progress study on Florida’s minimum wage increase, that shows there’s niether any serious inflation or job losses by increasing the minimum wage.
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In the Florida case, for example, the price of a twenty dollar shirt increased by approximately 2-3 cents, easily offset by the increased profits companies would get because a plethora of people would have more money in their pockets (because when minimum wage goes up, there’s usually a small, but very positive, bubble effect that helps a whole lot of people who make a little more than minimum wage).
And a statement on page 7 of that study pretty much sums it up, where it states: “In fact, the argument that raising the minimum wage will destroy jobs (or reduce hours of work) is a staple of economics textbooks. To see this, one need look no further than to Principles of Economics, a textbook coauthored by Karl E. Case, one of the signers of the âEconomistsâ Statement,â for an example. (emphasis mine)
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This argument is indeed a “staple” of many economic textbooks, but the important thing to realize is that this is economic THEORY. In economic PRACTICE, the evidence for destruction of jobs is slim indeed.
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The only argument that to me that holds any water (in theory) is that the minimum wage could potentially hurt struggling very small businesses whose owners are just scraping by. Yet even here I haven’t seen solid data pointing to mass small biz closures because of a min. wage hike.
I’m convinced. It’s such a good idea they should make the minimum wage $15 per hour. Right?
the slippery slope argument makes its appearance. I was waiting for that to happen.
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Why is it always that conservatives always chortle: “why not a $15 minimum wage? Or $20? Or $100?”.
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No.
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We are not talking about that. We are talking a small raise to help workers keep up with inflationary pressures and help them scrape by. This is not some miraculous get rich scheme that is being perpetuated on the Commonwealth.
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Seriously, drop the slippery slope argument.
This makes less than no sense. Other posters have responded in like vein, so just let me add, in response to some of those comments, that “economic theory” does NOT hold that increasing the minimum wage will destroy jobs (or whatever right-wing mantra you want to choose). If you’re going to make statements like this, please cite a source.
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As some posters have said (or at least hinted at), increasing the minimum wage increases jobs by giving money to those who are most likely to spend it, thus stimulating the local economy.
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And, as one poster suggested, let’s talk facts [empirical studies], not the cocktail napkin theories of the supply-siders.
be it $8 per hour; $10 per hour, $15, or $7.50, less or more, it WILL, at some level, cause employers to not hire the person because he or she is simply not worth the minimum wage.
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Disagree? Agree?
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The Legislature has decided that the per hour rate is magically established to be $ X.
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The politicians gamble that the hourly rate of $ X will NOT cost some of the lower paid folks their job. Beaconhill.org estimates that the Legislature is wrong and the Bill will result in 20-30 thousand jobs lost.
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Perhaps the Legislature is right or perhaps not. But, it’s too compelling a Bill to vote against: Please the Unions, please the populus because you sound compassionate.
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Do the research and economists are on both sides of the minimum wage effects, but all economists, (yes, 100%) agree that at some level a mandated wage will cost jobs to those who can least afford.
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What do you mean “cost jobs”? What do you mean “those who can least afford”? Afford what? Please tell me how you know that “100%” of economists agree on anything, let alone your confused construction.
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I’m an economist, and I probably don’t agree with you, but I’m not really sure what you mean, so can’t say for sure.
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To be fair, this is a highly complex problem, and the optimal solution involves a lot more than the level of prevailing wages (whether “mandated” or not). Basically, at issue is the share that is fair for labor to receive relative to that of capital.
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The recent trend in this country has been to increase rewards for capital (e.g. tax cuts for the extremely wealthy) at the expense of labor. This is a societal decision, and one that I’m not happy with.
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So, if you please, let’s talk about the real issue, which is that the working class is not sharing in the prosperity of the economy as a whole, and income disparities are widening in favor of the already-rich. This is a path to disaster, in my opinion.
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A higher minimum wage is a spit in the bucket as far as I’m concerned. Our problems go far deeper than that. But I’ll stop there before I start to sound as radical as I’d like to…
is probably quite true. I think all economists would agree that at some point a mandated wage would cost jobs.
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But to use this as an argument against modestly raising the wage (to less than it was, taking into account inflation, in other economically booming times BTW) is like saying: “At some point all economists agree that too high a mandated tax rate will hurt the economy. Thus, raising taxes even a modest amount is a bad idea!”
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The second half of that statement does not follow from the first. Just because, for example, a top marginal rate of 101% (like Sweden had for a bit) would likely hurt the economy doesn’t mean that raising the rate to 40% from its current 35% would. Very similar to the minimum wage situation.
Im almost afraid of posting here because frank will probably bash me……….. in the end. Maybe most economists would agree that at some point jobs would be lost but what jobs??? As a small business operator (just under 40 employees and almot 1.7 m prt yr.) I believed el;iminating the minimum wage would cause the market to raise wages and it wont. The proof is in the fact that the min wage hasnt been raised in yhear and ther are still companies that pay it…….Why???? i have my own thoughjt and I believe most of it has to do with work requirements but have no data so that is my opinion.
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The abosolute minimue I pay is 8.46….;.; and that is to employees with out education or experience in our field. When The minimue goes up I’ve a tough decision to make…wil I pay .46 over the minumum or will I raise it proportionately. I am wondering just hoe many employers actually pay their employees minimum wage and what jobs will be effected.
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Here comes the Frank Bashing…… I know that Tim Murray has been talking about raising the minimue wage, I know he has challenged Reed Hillman and Kerry Healy to support the raise in the minimum wage. He has not challenged the other demoract candidates he has challenged the republicans.
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Frank and I seldom agree….especia;;y when it comes to the LG race. One thing we do agree on is that we have to keep our eye on the price….. I am certain I will support any DEM LG on the ticket after the primary, I am justt asking they all supporty the increas in the minumue wage
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That way, you could pay workers $0 an hour! That would be great for business, wouldn’t it? I’m sure economists would agree.
…but such suggestion will never likely come from an economist.
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It was actually T.R. Malthous and John Stuart Mill, noted economists and philosopher of the 19th century, who advanced the revolutionary idea that people were basically all the same, and entitled to Liberty.
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They were attacked (intellectually speaking) by one of the greatest historians and speakers of the era, Thomas Carlyle, who dubbed the study of economics ‘the dismal science’ for such absurd thinking. The principal assumption was (and is) that each person has liberty and freedom to choose his or her own rate of pay for labour provided.
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Fiat labour rates (i.e. minimum wage) interfere with the presumption.
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Most economists would, in the 19th century, have disagreed with your assumption that slavery was good for business. Today, all would. Assuming that all people have liberty, then each is entitled to ‘name his own price.’ I know of no one who’d work for -0-.
“Assuming that all people have liberty, then each is entitled to ‘name his own price.'”
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Since this assumption is incorrect, it points to why the remainder of your position is off-base.
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I believe New York had the first-ever minimum wage, in response to large industrial corporations clearly taking advantage of worker’s weak bargaining position, in which a worker could certainly not “name his own price”. Nevertheless, it made sense for the business to pay something, since they needed workers to survive and get back to work.
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Nowadays, we undoubtedly have more workers who can “name their own price” than back then, mainly because of education and specialization. But for unskilled workers, the acceptable price is whatever the employers decide to pay them. It is for these persons, who lack the same liberties and freedom as others, that the minimum wage still has salience today.
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In fact, this all goes back to why economic theory and economic practice are so different. Economists live in a world in which the power dynamic and its effect on markets plays no role, and where petty human qualities such as greed do not exist.
Patrick isn’t necessarily playing both sides with that position. I agree he’s unclear, but I know one potential compromise talked about briefly would have indexed the minimum wage, but with a sunset provision a certain number of years (say 5) in the future. Then the legislature would revisit the issue then and decide to extend the indexing or let it sunset.
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If that is indeed his position, he could 1) be in favor of indexing yet also in favor of 2) the legislature revisting the issue regularly and 3) not putting the issue on “auto-pilot”.