Fact Sheet for An Act to Promote the Commonwealth’s Economic Recovery with a Strong Minimum Wage

Bill Lead Sponsors: Senator Marc Pacheco and Representative Antonio Cabral

Bill Number: SB 951, HB 2291

Bill Summary:  In brief, the bill seeks to increase the Massachusetts minimum wage to $10.00 per hour in three increments over the course of three years and will index the minimum wage to inflation thereafter.  More specifically, the bill would:

  • Increase the minimum wage from $8.00 per hour to $8.75 per hour effective July 1, 2011.
  • Increase the minimum wage from $8.75 per hour to $9.50 per hour effective July 1, 2012.
  • Increase the minimum wage from $9.50 per hour to $10.00 per house effective July 1, 2013.
  • Effective July 1, 2014 and in each year thereafter, increase the minimum wage by the growth in the Consumer Price Index for All Urban Consumers (CPI-U) based on the most recent twelve-month period for which data is available, so that the minimum wage does not erode year after year.
  • Set the cash wage employers must pay tipped employees equal to 70 percent of the current minimum wage – approximately the same percentage that Connecticut and New York use.  At present, the amount that employers must pay such employees has been frozen at just $2.63 per hour since 1999, which is equal to just 33% of the minimum wage today.  (Under current law, if the tips a tipped employee receives, when added to the cash wage the worker earns, do not equal the minimum wage, the employer must make up the difference. This requirement would be maintained under the bill.)

Rationale:

  • The minimum wage would be more than $10.00 per hour today if it had kept pace with the rising cost of living over the past 40 years.  Instead it’s stuck at $8.00, which translates to just $16,640 for a full-time worker.
  • Ten other states already adjust the minimum wages each year based on the Consumer Price Index – a key reform that prevents it from falling in value each year. (Department of Labor: http://www.dol.gov/whd/minwage/america.htm#Consolidated)
  • More American families are relying on low-wage jobs than ever before.  This has only become worse since the recent recession:  the U.S. lost a lot of high-paying jobs in construction and manufacturing, but the jobs that are now growing again are disproportionately in low-wage industries like retail and restaurants. (NELP: http://www.nelp.org/page/-/Justice/2011/UnbalancedGrowthFeb2011.pdf?nocdn=1)
  • Raising the minimum wage is one of the most effective ways to restore the consumer spending that powers the state’s economy, as low-wage workers spend their higher wages at local businesses. (EPI Issue Brief #255: http://www.epi.org/page/-/IssueBrief255_Final.pdf)
  • Productivity in the United States has grown by over 112% since 1968, yet the real wages of minimum wage workers have declined by almost 1% per year on average during this period, even while the educational levels of low-wage workers has increased. (EPI Briefing Paper # 251)
  • Profit levels for most major low-wage employers have rebounded to pre-recession levels showing that they can afford to pay a higher minimum wage. (NELP & Univ. of Mass. Analysis)
  • Contrary to myth, the majority of low-wage workers work for large companies, not small businesses.  (NELP & Univ. of Mass. Analysis)
  • A single adult in Massachusetts needs to make almost $13 an hour just to keep up with basic expenses such as housing, healthcare, food, transportation, and essential personal and household items without relying on any public or private assistance. (Massachusetts Economic Independence Index 2010, Crittenton Women’s Union)
  • A single adult with just one preschool-age child would need to make at least $23 per hour to keep up with basic expenses plus child care. (Massachusetts Economic Independence Index 2010, Crittenton Women’s Union: http://www.liveworkthrive.org/site/assets/docs/Massachusetts_Economic_Independence_Index_030810.pdf)
  • In 2009, one in seven people were living in poverty, and one in five kids under the age of 18 was living in poverty. Young kids have been the hardest hit, with nearly one in four children under the age of 6 living in poverty. (EPI: The State of Working America)

For more information please contact Tim Sullivan, Legislative and Communications Director, Massachusetts AFL-CIO, at tsullivan@massaflcio.org or (781) 324-8230.