In a column in these pages on Feb. 3, the president of the Massachusetts Retailers Association called for delaying legislation to raise the state minimum wage until the bill includes labor law changes and reform of the unemployment compensation system. He suggested that this approach is favored by the “employer community.”
Not so fast. There are many Massachusetts employers who support an immediate hike in the minimum wage, and are unwilling to see this much-needed legislation delayed by tacking on other, much more complicated initiatives, as the Massachusetts Retailers Association would like.
As a member of the Alliance for Business Leadership, an organization of CEOs, investors, and business innovators, I am joined by many high-level executives in calling for an immediate rise in the minimum wage.
I am CEO of TRU Corporation, a company with 60 years of manufacturing experience on the North Shore. The success of TRU Corporation and many similar companies in our region relies on employees in all wage categories. As CEOs we depend on all our employees to get to work every day, stay healthy and minimize external distractions. In exchange for that expectation we need to set wages at a level that makes this possible. None of this is possible for employees whose pay cannot put food on the table or keep a roof over their heads.
While it can be unreasonable to expect a business in an industry that relies on low-wage workers to increase pay unilaterally and put itself at a competitive disadvantage, it is completely reasonable to level the playing field and ask every business to pay a higher minimum wage.
The important discussion of how to improve labor laws and reform the unemployment compensation system should go forward. But these are complicated questions that will take time to resolve in everyone’s best interests, and there is absolutely no reason to delay raising the minimum wage while we’re discussing further reforms.
What’s the rush? And why do employers support a rise in the minimum wage at all? Elementary economics tells us that we are standing at a crossroads nationally. According to the Pew Research Center, the inflation-adjusted federal minimum wage peaked in 1968. Since then it has lost ground, and even since it was last raised in 2009, the federal minimum has lost about 5.8 percent of its purchasing power to inflation.
This is a disaster for low-income families, but many observers may not appreciate the damage done to businesses and to the economy. It’s really very simple; if an average person can’t afford to buy a business’s goods or services, sales will be lost. When sales are lost, jobs are not created. It’s a vicious circle that begins with the failure of our society to ensure fair compensation for a day’s work.
Contrary to popular assumptions, the average age of a minimum wage employee is 35. Only 12 percent are under the age of 20, and 28 percent have children. These citizens should be the backbone of our economy, but they have been left behind by the recovery.
At this crossroads where inequality begins to threaten the health of our economy, we have many policy choices, but the basic premise that a day’s work should pay for a day of life is one we can all agree on, and the benefits to our economy of putting more dollars in the hands of our lowest earners are enormous. Not only will more goods and services be sold, but the stress on our safety net for those currently under the poverty line will be lessened.
As the Massachusetts Retailers Association says, “few would argue against some increase in the minimum wage.” Then let’s not wait. Raising the minimum wage is good for business, good for our neighbors, and good for America.
The state Senate has passed a bill raising the minimum wage. The House should take it up and pass it immediately. By all means, let the reforms continue. But don’t make those who can’t make ends meet wait another day. The time has come.
Linda Moulton is CEO of TRU Corporation in Peabody.