Massachusetts Poised to Have Highest Minimum Wage

Law would increase the state’s minimum wage from $8 to $11. Also, franchise group sues Seattle for $15-per-hour wage hike.

June 16, 2014

BOSTON – Last week the Massachusetts state Senate overwhelmingly passed a bill 35–4 to increase the hourly minimum wage rate from $8 to $11 by 2017, a move that puts the state “on the brink of approving the highest minimum wage of any state in the nation,” reports the Boston Globe.

The news source notes that the state House of Representatives is expected to approve the legislation this week, and Governor Deval Patrick has indicated that he supports a minimum wage increase. The bill would boost the minimum wage rate to $9 per hour on Jan. 1, 2015, and continue raising the rate $1 per year until it reaches $11 per hour on Jan. 1, 2017.

“I think it’s a question of fairness,” Senate President Therese Murray said in an interview with the news source after the vote. “When people work 30, 40 hours a week and they’re making $8 an hour, that’s not making it in Massachusetts.”

State Representative Tom Conroy commented that House passage is likely, noting that a majority of his colleagues will support the bill.

Jon Hurst, president of the Retail Association of Massachusetts, told the news source that a 38% minimum wage increase over three years “is a bit shocking” and cautions that it is harmful to small businesses: “We may look back on this day when we have a lot of dark stores on the 351 Main Streets in Massachusetts and say, ‘Why didn’t we take the concerns of small business more seriously?’”

The news source also points out that although economists are “divided on whether raising the minimum wage leads to job loss,” most agree that boosting the wage rate is not a good strategy for reducing poverty levels.

“It doesn’t give to the poorest, and it doesn’t take from the richest,” David Neumark, an economist at the University of California-Irvine, told the news source, adding that small businesses end up bearing the brunt of minimum wage increases.

In related news, the International Franchise Association (IFA) and five franchisees filed a lawsuit in U.S. District Court in Seattle seeking to block Seattle’s recently enacted law to increase the city’s minimum wage to $15 per-hour. The complaint alleges that the new law illegally discriminates against franchisees and improperly treats them not as the small, locally owned businesses they are, but as large, national companies.  

Seattle’s new law requires large businesses, defined as those with more than 500 employees, to raise the minimum wage they pay their employees to $15-an-hour over three years beginning on April 1, 2015. Smaller businesses have an extra four years, or a total of seven years, to phase in the wage increase.  

IFA’s lawsuit asserts that the Seattle statute unfairly requires Seattle’s 600 franchisees, who own 1,700 franchise locations and employ 19,000 workers, to meet the three-year deadline for large businesses simply because they operate as part of a franchise network. The lawsuit argues that the Seattle ordinance defies years of legal precedent clearly defining a franchisee as an independent local business owner who operates separately from the corporation that provides brand and marketing materials.

“We are not seeking special treatment for franchisees, we are just seeking equal treatment. The city’s minimum wage statute arbitrarily and illegally discriminates against franchisees and significantly increases their labor costs in ways that will harm their businesses, employees, consumers and Seattle’s economy,” said Steve Caldeira, IFA president and CEO, in a press release.

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