SalemNews.com, Salem, MA

March 21, 2014

Retailers bracing for possible minimum-wage hike

By Christian M. Wade
CNHI Statehouse Bureau

---- — BOSTON — Hundreds of thousands of low-wage workers will get a pay raise this summer if the state’s lawmakers can find common ground on increasing the state’s minimum wage, a move business leaders warn will squeeze small businesses and prompt layoffs.

“It would definitely hurt,” said Ali Shah, whose family has owned Salem House of Pizza and stores in Danvers and Peabody for more than a decade. “We’d probably have to increase prices or cut hours or something like that to make ends meet.

Yesterday, House Speaker Robert DeLeo, D-Winthrop, introduced legislation to increase the state’s minimum wage incrementally from $8 to $9 per hour this July, $10 next year and $10.50 by 2016.

DeLeo’s bill also proposes raising the minimum wage for tipped workers — mainly restaurant and hotel staff — from $2.63 to $3.75 an hour by 2016.

The Massachusetts minimum wage hasn’t been increased since 2008. The state Senate in November approved a measure raising it to $11 an hour and tipped wages to $4 by 2016. The Senate version tied subsequent increases to inflation, similar to other New England states.

Jon Hurst, president of the Retailers Association of Massachusetts, said his members are already preparing to dig deeper into their pockets.

“We’re at the point where we recognize a big increase is coming and that it will hurt a lot of retailers,” Hurst said. “We’re just trying to mitigate the severity of the damage.”

Hurst said opponents are focusing on amending the final bill to include repeal of the state law requiring time-and-a-half pay for retail workers on Sunday, a requirement he calls discriminatory.

“You would have 14-year-olds bagging groceries and stocking shelves on Sunday and getting paid a minimum $16.50 an hour,” he said. “We need to repeal that law.”

Rep. John Keenan, D-Salem, said he supports raising the minimum wage but wants safeguards for small-business owners.

“We obviously want to help out those on the lower rungs, but we don’t want to hurt small-business owners, a lot of whom are still struggling,” Keenan said.

The state’s minimum wage is now one of the highest in the country, but either the Senate or House bills would put Massachusetts at the top of the scale. New York and Connecticut currently have the highest rates, at $9 an hour. Their legislatures are also considering increases.

New Hampshire’s House of Representatives recently voted to increase its minimum wage from $7.25 to $9, but the Senate still must approve the measure, no sure bet given the conservative nature of the Granite State. In Vermont, where annual increases are tied to inflation, the minimum wage is $8.73. In Connecticut, it’s $8.70; Rhode Island, $8; and Maine, $7.50.

“The cost of everything else is going up, but workers aren’t getting more,” said Lisa Salvadorini, who works for $9 an hour at a Dunkin’ Donuts in Peabody. “It’s the right thing to do.”

In January, President Barack Obama signed an executive order increasing the minimum wage for workers under new federal contracts to $10.10 an hour, up from $7.25, as part of an effort to build momentum to raise the federal minimum wage. The federal rate has been pegged at $7.25 per hour since 2009.

The White House estimates nearly 500,000 federal workers in Massachusetts will get a pay raise because of the executive order.

Robert Bradford, president of the North Shore Chamber of Commerce, said retailers aren’t stingy, but they want to make sure any increase doesn’t “put them at a competitive disadvantage” with stores in Maine and New Hampshire.

The chamber’s board of directors voted in January to oppose the Senate bill, but it hasn’t taken a position on DeLeo’s bill.

“We’re not opposed to raising the minimum wage. We just want to make sure that it’s in line with neighboring states,” Bradford said. “We want a level playing field.”

AT A GLANCe

House Bill

Raises minimum wage incrementally to $10.50 an hour by 2016

Raises minimum wage for tipped workers from $2.63 to $3.75 an hour by 2016.

No provision for increases after 2016 tied to inflation

Senate Bill

Raises minimum wage incrementally to $11 an hour by 2016.

Raises minimum wage for tipped workers to $4 by 2016.

Allows for increases after 2016 tied to inflation.