So now we know what our new minimum wage is going to be.
House Speaker Bob DeLeo unveiled his plans for raising the state’s minimum wage today, plans that would drive the floor from $8 an hour to $10.50 an hour over the course of three years. The first jump would occur on July 1, to $9 an hour. The second would take place a year later, to $10 an hour. And then, finally, there would be a jump to $10.50 in mid-2016.
This, of course, isn’t a done deal. But DeLeo wouldn’t have showcased it in his speech to the Greater Boston Chamber of Commerce today if he didn’t think he had the votes to push this through the House.
The House leadership bill essentially mirrors the bill the Senate passed in November in terms of the overall minimum wage. The Senate version would take the floor from $9 to $10, and then finally to $11 an hour. So there’s just 50 cents separating the two bills for that final year. That one shouldn’t be too difficult to hash out in the inevitable conference committee.
There is a more significant difference between the two bills, though, and it involves tipped employees. The Senate bill would push the minimum floor that employers would need to pay tipped employees from $2.63 to $4.50 an hour overnight by mandating that it equals half of the overall minimum wage. By 2016, that floor for tipped workers would go up to $5.50 an hour under the Senate bill.
Restaurateurs were up in arms. They were blindsided when this was added to the Senate bill in November. They pointed out that waiters’ and waitresses’ wages in Massachusetts are already the highest in the country ( an average of $13.13 an hour, including tips and employers' pay), and that restaurant owners are responsible for picking up the difference on slow nights when workers’ pay with tips don’t equal the minimum wage.
When I spoke to DeLeo in February, he hinted that he would take restaurateurs’ concerns into consideration in his minimum wage bill. And he has — but he just hasn’t been as lenient as they would like.
DeLeo would raise the tipped minimum that employers need to pay to $3 an hour, then to $3.35, and finally to $3.75. That represents a 42 percent increase over the course of three years. It may seem like a lot, but it’s small compared to the 109 percent increase that the Senate leadership wants. This is a more balanced approach than the Senate's, but DeLeo might need to concede more ground during conference negotiations.
DeLeo's speech coincided with the arrival of President Barack Obama's labor secretary, Thomas Perez, in the Boston area. Perez appeared this morning at Cambridge Naturals in Cambridge to promote the president's push to raise the federal minimum wage from $7.25 an hour to $10.10 per hour over the course of two years.
"Workers should share in the prosperity that businesses are seeing ... and that's not happening," Perez told me after his event. "When you raise the minimum wage, you put money in people's pockets. When you raise the minimum wage, you create a more loyal, effective workforce.
Republicans in Congress have largely rebuffed Obama's minimum wage push, and critics in the GOP point to a recent Congressional Budget Office report that showed a two-thirds chance that the increase to $10.10 per hour would lead to a net loss in jobs by the time it's fully implemented in 2016. The most widely cited figure is a projected loss of 500,000 jobs, or 0.3 percent nationwide, although the CBO says the actual number could vary widely from its projection.
So the Obama administration has also been trying to make its case on the state level, supporting efforts in numerous states like Massachusetts to raise the minimum wage. As of January, 21 states and the District of Columbia had minimum wages that exceeded the federal standard.
"Change doesn't initiate in Washington, change comes to Washington," Perez said. "That's why we strongly support the efforts in Massachusetts, and in local efforts across the country."