, Salem, MA


June 26, 2013

Waging debate

Business owners fear effects of minimum wage hike


By 2016, the minimum wage would be adjusted for inflation.

The minimum wage for waitstaff would also go up. It’s $2.63 an hour for those who receive more than $20 a month in tips. The law says the wage with tips must be equal to the minimum wage. Under the bill, those depending on tips would receive at least 70 percent of the minimum wage, which would be $6.30 an hour at the $9 an hour rate.

But there is a lot of controversy about whether a higher minimum wage is a good idea. Many business people, like the Baccis, oppose it because it raises their costs. Advocates for the poor have been pressing for it as a way to help those at the bottom of the economic ladder. Economists are split, some saying it will hurt the economy, and others saying it will help.

State Sen. Joan Lovely, D-Salem, said she has not signed onto Pacheco’s bill because she is waiting to hear more debate about it. But she’s leaning in favor of some kind of increase.

“I am in favor of increasing the minimum wage for a variety of reasons,” Lovely said. One of her main reasons is that the minimum wage is so low that people who are out of work often prefer to stay on public assistance rather than work for minimum wage and make less money.

“If the numbers don’t add up, then the fallback is to go on public assistance and not go to work,” said Lovely, who wants even low-wage workers to earn enough to live on.

On the other hand, she said a couple of businesses have called her to tell her: “‘Don’t touch it, we can’t afford it.’”

Kevin Beckwith, an assistant economics professor at Salem State University, said there’s a debate among economists as to whether there should even be a minimum wage — whether the free market should be the one to dictate wages or the government should prop up the wages of unskilled workers to keep up with inflation. There’s debate about whether raising the minimum wage puts more money in low-wage earners’ pockets at the expense of companies pulling back on hiring, thus creating more unemployment.

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