New Bedford Guide Your Guide to New Bedford and South Coast, MA
Last Tuesday, the state senate voted to increase the minimum wage from $8 to $11 an hour by the year 2016. The bill passed by a 32-7 vote and still has to pass the Massachusetts House of Representatives and be signed by Governor Deval Patrick.
Here is what to expect if this bill is signed into law:
1. Starting in July of 2014, the minimum wage would go up from $8 to $11 by 2016.
2. Massachusetts will always be $0.50 cents higher than the national average.
3. The wage for tipped employees would increase under this bill to half the minimum for hourly workers. Currently, the rate in Massachusetts is $2.63. This would go to $4 an hour and eventually to $5.50 an hour by 2016.
4. This rate would ensure Massachusetts has the highest minimum wage in America. According to CNN, Washington currently has the highest minimum wage at $9.19 per hour.
5. The minimum wage is tied to inflation and be linked to the Consumer Price Index for the Northeast.
6. Those who oppose the bill state that businesses will pass the increased cost on to consumers in the form of higher prices. Bob Luz the CEO of the Massachusetts Restaurant Association states that tipped employees already make $13.13 per hour and predicts that menu prices will go up 15% due to this increase. Other negative affects would be a cut to worker benefits, less part-time jobs coming available and this would not help attracting new businesses to Massachusetts.
7. Proponents state that there hasn’t been a raise to the minimum wage in MA since 2008 and it is NOT tied to inflation. It is extremely difficult to live on $8 an hour in Massachusetts. There is a move to put this minimum wage increase onto the November 2014 ballot if it doesn’t get signed into law.
This is great news! And who cares if prices of food goes up?? If people are making more money. Then people have more money to spend. So what the h*ll does it matter if it the food cost a little more id still buy it with my higher wages!!! And with the publicity of the waitresses making more and food prices going up they will probably receive less in tips which would be therefore balanced by there higher wage. So in all reality everything will work out just fine!
The question was put out whether one would agree with increasing the minimum wage. It seems the deal is done in that regard since raises go in to effect in 2014, but my answer to that question would be “no” for the following reason (it’s one of the reasons opponents have stated in #8 in the article).
A raise in the minimum wage WILL cause a raise in consumer prices and business costs–it’s basic economics.Any movement in prices, whether upward or downward, will have a corresponding movement in prices. It may not be very obvious–which I believe it’s why it passed into law–but it will cause inflation for every one. That includes the employees who receive the raises as well. When the price of commodities, dinners, transportation, and restaurant service rises it also raises for those who got the raise bringing them right back to where they were with one exception–they are now in a higher tax bracket and will now have to pay more in taxes–possibly leaving them worse off than they were before. The culture of trying to fix things by mandate only forces businesses and tradespeople to change the way they do business in order to protect the margins of profit they have come to expect from their business in the same way as ordinary people find ways to hide income when tax levels increase. The balance will be maintained whether government and uninformed individuals want it to or not. For those not versed in economics it comes out as unintended consequences that they still can’t buy what they thought they would be able to. For the rest of us it’s back to work and to find a way to keep and make our money. Peace and good luck to all.