Speaker DeLeo’s Minimum Wage Proposal Bad News for Bay State Business

( – promoted by Rob “EaBo Clipper” Eno)

We Need to Do Good, Not Just Feel Good

Boston, MA: The House version of a minimum wage hike, which seeks to raise the current $8.00/hour minimum wage to $10.50/hour by 2016 among other changes, remains likely to send thousands of Massachusetts workers on to the unemployment rolls.

The package, introduced by Speaker Robert DeLeo of Winthrop, also includes an increase to the minimum wage for tipped employees. Unlike the plan that passed the Senate late last year, DeLeo’s legislation includes changes to the state’s unemployment insurance system, and does not index the minimum wage to inflation.

 

“Just like the Senate’s proposal, the Speaker’s ideas would force employers to fire many of their low-wage workers, or to expand more slowly than they had planned,” stated Paul Craney, executive director of the Massachusetts Fiscal Alliance. “A vote to raise the minimum wage is a vote for inflation, pure and simple. It is also a vote against the vast majority of people who actually make the minimum wage: young and first-time workers who still live at home, especially those in the inner cities where unemployment can be double the state average; seniors looking to supplement a fixed income; and special needs individuals for whom a job is sign of their independence.”

A recent study by the Congressional Budget Office of a proposal to raise the federal minimum wage to $10.10/hour suggested that it could cost nearly 1 million jobs nationwide. Both the House and Senate versions call for an even larger increase, suggesting that the impact would likely be even more significant.

“We consider this one of our top issues, and we will be including the final vote on this proposal on our legislative scorecard. Helping those who are less well-off is a noble goal, but we should be looking to do good, not just feel good. Countless studies have shown that other ways more effectively target those who need the help while causing less disruption to the labor market.” Craney concluded. “Representative DeLeo’s proposal may be a little less extreme than his colleagues in the Senate have offered, but both plans are very similar: they’re both bad for the people of the Commonwealth.”

As always, with any questions or comments, please feel free to contact Paul D. Craney at paul@massfiscal.org.

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