To view this site, you need to have Flash Player 9.0.115 or later installed. Click here to get the latest Flash player.
(NECN: Peter Howe, Boston) - After the company she was working for lost a special-needs driving contract with the MBTA, Patricia Federico of Weymouth, Mass., has been scraping by on a little more than $8 an hour working 21 hours a week at a cinema.
So her motivation for coming to the State House Tuesday to join hundreds lobbying for an increase in the state minimum wage was intensely personal.
"The immediate reason is, I desperately need the $11 an hour," Federico said in an interview outside the Gardner Auditorium hearing by the Legislature’s Joint Committee on Labor and Workforce Development.
"I don't have any assistance. I don't get fuel assistance. I don't get food assistance. I am working basically to put gas in my car to get to work to buy the food," Federico said. "They're talking about raising it to $11 in the next three years," Federico said. "I need that $11 – now."
With hundreds of union members and social-justice advocates cheering on dozens of legislators backing a minimum-wage increase, including Senate President Therese Murray, the plan also is sparking concerns from many business leaders.
Bill Vernon, Massachusetts chapter director of the National Federation of Independent Business, said, "You cannot expect to raise the cost of labor and not lose jobs or job opportunities."
Massachusetts’ $8 an hour minimum wage already is higher than every surrounding state except Vermont ($8.60) and Connecticut ($8.25).
Plans to, variously, raise it to $11 by 2015 or 2016 and then permanently index it to inflation could, some business leaders say, price teenagers and low-skilled workers out of the job market.
Jon Hurst, president of the Retailers Association of Massachusetts, said, "Are we hurting those that want to have that first work experience and that first opportunity to get through the door in the first place? Frankly, a lot of folks are not getting that opportunity in this day and age, and that's a problem."
Paul Diego Craney of the Massachusetts Fiscal Alliance said the state should work on lowering the cost of living and cost of doing business and focusing on ways to develop a better-skilled workforce that can command better wages.
"A lot of these small businesses, you know, they're struggling to make ends meet, especially outside of Boston, so to create another mandate to make it harder for them to meet payroll -- it's a problem. They're just not going to hire as many people," he said
But UMass-Boston economist Randy Albeda and others say data prove many of those fears are overblown. "Employers and employees make up for that wage increase, typically through higher productivity, often with less turnover," which reduces costs for employers because they don’t have to retrain and assimilate as many new employees. "We adapt," Albelda said. "Firms adapt. Employees adapt. Consumers adapt. The sky won't fall."
Katherine Mainzer, co-founder and CEO of Bellaluna restaurant and Milky Way Lounge in Boston’s Jamaica Plain section, who pays her staff above minimum wage, is confident other business owners would find higher minimum wage would be little to no net hit on their bottom line.
"One way that it pays for itself, a higher wage, is in reduced turnover and in lower training costs," Mainzer said. "When we invest in our employees, they invest in our business."
There’s no indication on when a minimum wage bill might come to the full House and Senate for a vote, and whether it would come in somewhere short of the $11 the AFL-CIO and Service Employees International Union and others seek.
There are signs, however, of a possible compromise, with business groups maybe willing to accept some level of increased minimum wage to keep pace with inflation and to go beyond that if it comes in a package with other payroll concessions like and end to mandatory overtime pay on Sundays for larger retailers.
"Is it time to repeal the 'time and a half pay on Sunday' requirement, for instance?" the retailers’ association’s Hurst said. "Is it time to look at a teen wage?" In considering a legislative package that includes a change to the minimum wage, Hurst said, "Let's look at something reasonable that doesn't put us at a competitive disadvantage with others in the region."
With videographer Jason Marder