STATE HOUSE, BOSTON, MARCH 13, 2014….Though not as generous as the Senate’s package, House Speaker Robert DeLeo’s proposal to raise the minimum wage to $10.50 an hour would still give Massachusetts the highest wage floor in the country. However, it remains to be seen whether it will be enough to stop ballot activists from pursuing more in November.
In a speech to the Greater Boston Chamber of Commerce on Thursday morning, DeLeo outlined his response to a bill approved last November by the Senate raising the minimum wage to $11 an hour over three years. The Senate subsequently approved a bill reforming the state’s unemployment insurance system, also a goal of DeLeo.
By coupling the issues together, the Winthrop Democrat said the House could achieve a “careful balancing act and one that involves improving conditions for workers at the bottom of our wage scale while creating a climate that permits businesses to create jobs.”
DeLeo’s plan calls for a phased-in hike in the minimum wage from its current level of $8 an hour to $10.50 an hour by July 2016, but the speaker opted against linking future wage increase to inflation as the Senate did and as the coalition behind a proposed ballot question is seeking to accomplish in November.
“When I talked to business groups, one of the major factors I see and hear is the fact of predictability in expenses and taxes number one. The other thing is Massachusetts, despite the fact that it’s not been tied to inflation, is still one of the highest states in the country in terms of what we provide for minimum wage,” DeLeo, who last year agreed to index the gas tax to inflation, said after his speech.
If it’s necessary “come years down the road” to adjust the minimum wage, DeLeo said, “we’ll tackle it again.”
The Raise Up Coalition, which includes Lew Finfer of the Communities Action Network and AFL-CIO President Steve Tolman, said DeLeo’s support to go to $10.50 was “welcome news for low-wage workers” but reiterated its support for indexing the wage to inflation and raising the wage for tipped workers higher than the $3.75 proposed by the speaker.
“The Senate bill incudes language that would tie future increases to the rising cost of living and we think that’s an important component included in our ballot question,” said Steve Crawford, a spokesman for the coalition. “Beginning in May we need to begin collecting signatures and we’re actively beginning to mobilize right now.”
On Thursday, long after DeLeo outlined details of his preferred approach to the minimum wage and unemployment insurance, Senate President Therese Murray said after a Senate session, “I haven’t seen it, so I can’t give you my thoughts.” Asked about the recommended $10.50 wage floor, she said, “When we get it, I’ll let you know.”
Asked about DeLeo’s call for the minimum wage and unemployment insurance to be addressed together, Murray said, “Senate’s already passed a minimum wage increase and we passed a UI bill.”
Sen. Marc Pacheco, the original Senate sponsor of minimum wage legislation this session, said he didn’t think DeLeo’s proposal went far enough.
“We have $10.50 an hour on the ballot, but tied to inflation so I don’t see any reason why we should go any less than that in terms of it being tied to inflation,” Pacheco said.
The coalition has until July 2 to make a decision since final signatures to qualify for the ballot are due to the secretary of state. If the Legislature takes longer to finalize a bill, there is a possibility of a repeat of two years ago when legislation concerning access to auto repair information passed the Legislature too late to remove a competing question from the ballot.
With an actual bill still possibly weeks away from release, some in the business community were also reluctant on Thursday to weigh in on the speaker’s unemployment insurance reform proposal, which includes a freeze in rates this year to avoid spiking premiums for businesses.
DeLeo said the House was probably “a week or two away from final completion of getting the bill in written form,” and Labor Committee co-chair Rep. Thomas Conroy said the committee planned to meet next Tuesday to make recommendations on a host of bills that he said may include the wage-UI bill.
“This session anyway, let’s leave it at that,” DeLeo said when asked his timetable for bringing a bill to a vote.
Michael Widmer, president of the Massachusetts Taxpayers Foundation, said he will be curious to see how the House approaches the taxable wage base for unemployment insurance. “The devil is in the details,” Widmer said. “If the minimum wage is part of real UI reform, it’s a reasonable approach.”
Retailers Association of Massachusetts President Jon Hurst was equally uncertain whether to embrace or criticize the proposal without knowing more specifics. “I’m still grappling with where the savings are for employers,” Hurst said. “If you don’t deal with the overall cost of the system, it’s a pay me now or pay me later proposition, so I want to see if there’s something that would give organized labor some pause and concern.”
Hurst said Massachusetts is the only state in the country that doesn’t have a firm eligibility test requiring beneficiaries to work a set amount time before qualifying for benefits, instead relying solely on an earnings test.
“The real reform is the loopholes on eligibility. Too many people game the system, employees and employers alike, that qualify far under 15 weeks. The conventional wisdom is that it takes 15 weeks to qualify. Reality is that’s not true,” Hurst said.
DeLeo said he does not expect the final bill to include any adjustments to the duration of benefits, currently among the most generous in the country at 30 weeks, but did not specifically address eligibility requirements.
House Minority Leader Brad Jones said DeLeo’s proposal was preferable to the Senate’s bill, but “falls flat” in its failure to include an increase in the earned income tax credit and the “lack of an aggressive approach to unemployment reform.”
“By starting at a lower hourly wage than the State Senate’s proposal, the Speaker’s proposal is a better place to start the conversation about crafting a plan that balances the needs of our state’s workforce and the concerns of the thousands of small businesses that are the backbone of Massachusetts’ economy,” Jones said in a statement.
The North Reading Republican also said the speaker’s tipped-worker wage proposal was “more responsible” than competing plans.
Bill Vernon, state director of the National Federation of Independent Business, said the unemployment insurance reforms outlined by the speaker won’t do enough to offset the added cost to employers of paying higher wages.
“It’s a good faith effort to soften the impact of raising labor costs on small businesses but in the end it will add to the cost of running a small business and force small businesses into making difficult hiring decisions,” Vernon said.
Rep. Sarah Peake, a Provincetown Democrat, said there were areas in the Senate bill relating to seasonal employment, which is prevalent on the Cape, that were “very problematic” in her view, and she saw the speaker’s proposal as a “very positive step.”
“I think it’s important that we not cut benefits because people who need them really need them and if they need them for 30 weeks, they need them for 30 weeks and shouldn’t make the decision arbitrarily to cut that back. Let the federal government do that. I think that was a little hard-hearted on their part,” Peake said.
Democratic candidate for governor Steve Grossman, the state treasurer, is backing the Senate bill.
“The Speaker’s proposal is a constructive step, but I urge the House to amend it,” Grossman said in a statement released by his campaign. “Massachusetts workers deserve to earn livable wages, which requires indexing the minimum wage to inflation, without seeing government cut unemployment benefits our citizens so urgently need. That is why I continue to strongly support the Senate bill.”
[Mike Deehan contributed reporting]
Copyright 2014 State House News Service