Senate President's Involvement Guarantees Serious Look at Raising the Minimum Wage

Friday, May 24, 2013

“We are not seeing any good news when it comes to what workers are being paid,” Senate President Therese Murray told an audience gathered at a downtown hotel for a Greater Boston Chamber of Commerce breakfast on April 11.
“We must address the rate of pay for workers in Massachusetts,” she declared.
Murray has always stood up for legislation she believes will protect the living standards of the middle class.  “The middle class built this country, and we will never help this country by weakening the middle class,” she has said on numerous occasions.
It is a position Murray shares with many notable figures across the nation -- Joseph Stiglitz, who won a Nobel prize in economics, for instance.
“…the hollowing out of the middle class since the 1970s, a phenomenon interrupted only briefly in the 1990s, means that they  are unable to invest in their future, by educating themselves and their children and by starting or improving businesses,” Stiglitz wrote in a New York Times “Opinionator” piece on January 19, 2013.
The middle class is squeezed from all sides.  After a middle class wage earner pays her taxes, her health insurance premiums and co-pays, her mortgage, her car payment, her fuel bills and her children's college tuitions, she doesn't have much left for frills like restaurant meals, theater tickets, and vacation get-aways.

But if things are tough for the middle class, they're brutal for those at the bottom of the scale, the minimum wage earners.  If you work full-time for the minimum wage in Massachusetts, which now stands at $8 an hour, you make $16,707 a year -- almost $7,000 below the federal poverty level of $23,550 for a family of four.

Senate President Murray clearly favors an increase in the state’s minimum wage, but she has shied away from saying how much she thinks it should be raised.  This makes sense.  Why get pinned down on a particular number at this point in the legislative calendar?
If Murray said, for example, that the minimum wage should be $11, as some in the legislature have asserted, she would sacrifice room she may need to maneuver in if a wage bill gets nears the Senate floor.  She’d also risk taking fire prematurely from businesses who may be opposed to a minimum wage hike.
Better to get the conversation going, prod it along, and hope a consensus emerges on what is both desirable and achievable.
The last time the minimum wage went up was over five years ago, in January, 2008.
Two weeks after speaking to the Greater Boston Chamber, Murray again raised the issue of pay for workers in remarks to a delegation from the Affiliated Chambers of Greater Springfield.
“When you don’t make a living wage, government and business pay taxes that fill in that gap,” she said.  “So when you say government has grown too large, what you’re getting is government is paying for day care, for subsidized day care, for subsidized meals at school, breakfast, lunch and dinners and after-school programs.  We’re paying for transportation.  We’re paying for subsidized housing.  We’re paying for fuel assistance in conjunction with the federal government.  So you’re paying it anyway.”
A minimum wage worker's annual earnings, she noted, are almost $12,000 below what is required for someone to be economically independent in Massachusetts.
As she was leaving the Senate Reading Room, where the Springfield area group was gathered, Murray was asked if she had an idea of where the minimum wage should be today.  “Not at the moment,” she said. “I’ve been meeting with lots of people who have a great interest in talking about it.”
Astute political leaders, like the Senate President, strive for balance in a bill that tinkers with the economy.  Push too hard for workers and they could inhibit investment and growth.  Bow too deep to capitalistic prerogatives and they could produce nothing meaningful for workers.
My guess is that Murray believes it’s time to err on the side of the low-wage workers of the Commonwealth.  I think she’d agree with Stiglitz that inequality in income, and other areas of life, is hindering the performance of our free enterprise system.
Stiglitz, in his January 19 Opinionator column, said:
“In this election (the November presidential election), each side debated issues that deeply worry me: the long malaise into which the economy seems to be settling, and the growing divide between the 1 percent and the rest – an inequality not only of outcomes but also of opportunity.  To me, these problems are two sides of the same coin: with inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream – a good life in exchange for hard work – is slowly dying.
“Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined.  Inequality stifles, restrains and holds back our growth.  When even the free-market-oriented magazine The Economist argues – as it did in a special feature in October – that the magnitude and nature of the country’s inequality represent a serious threat to America, we should know that something has gone horribly wrong.  And yet, after four decades of widening inequality and the greatest economic downturn since the Depression, we haven’t done anything about it.”
Stiglitz was one of ten signatories to a letter submitted last July to Congressional leaders recommending a three-phase increase in the federal minimum wage over three years totaling $2.55.  Currently, the federal minimum is $7.25 an hour. 
“This policy would directly provide higher wages for close to 20 million workers by 2014,” the letter stated.  “Furthermore, another 9 million workers whose wages are just above the new minimum would likely see a wage increase through ‘spillover’ effects, as employers adjust their internal wage ladders.  The vast majority of employees who would benefit are adults in working families, disproportionately women, who work at least 20 hours a week and depend on these earnings to make ends meet.  At a time when persistent high unemployment is putting enormous downward pressure on wages, such a minimum wage increase would provide a much-needed boost to the earnings of low-wage workers.”
Others who signed this letter included Daron Acemoglu, an economics professor at MIT; Michael Reich, director of the Institute for Research on Labor and Employment at the University of California at Berkeley; and Robert Reich, Secretary of Labor in the Clinton administration.
In the current session of the Massachusetts legislature, two bills have been filed to raise the state’s minimum wage.  The one with the strongest support appears to be House 1701, An Act to Improve the Commonwealth’s Economy with a Strong Minimum Wage.  An identical bill in the upper branch is Senate 878.
House 1701 and Senate 878 would increase the minimum wage in three steps, bringing it to $11 by January 1, 2016.  Thereafter, the legislation would mandate annual minimum wage hikes proportionate to cost-of-living increases tied to the Consumer Price Index for All Urban Consumers.
Forty-seven members of the House (29% of the body) and fourteen members of the Senate (35%) are co-sponsoring these bills.  That’s a formidable bloc. 
We’ll learn how formidable the opposition is on June 11, the day the Joint Committee on Labor and Workforce Development will hold a hearing on both.

PEOPLE STRONGLY SUPPORT UPPING THE MINIMUM: In a Suffolk University/7 News poll released earlier this month, 77% of respondents said they supported a $2 increase in the minimum wage, to $10 an hour.  In that same poll, 61% said Massachusetts was still in a recession. 

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