BOSTON (AP) — The state’s minimum wage would rise to $10.50 per hour over three years but would not be automatically adjusted for inflation under a proposal unveiled Thursday by a top Massachusetts lawmaker.
In a speech to the Greater Boston Chamber of Commerce, House Speaker Robert DeLeo, D-Winthrop, also said the plan for increasing the minimum wage increase would be linked to changes designed to offer relief for businesses from high unemployment insurance rates.
“It is a careful balancing act and one that involves improving conditions for workers at the bottom of our wage scale while creating a climate that permits businesses to create jobs,” DeLeo said.
The House minimum wage proposal is less generous than a bill approved last November in the state Senate that would increase the state’s $8 per hour minimum wage to $11 per hour over the same three-year period, and would index future changes to inflation.
DeLeo said the House bill would boost the minimum wage to $9 on July 1, to $10 a year later and $10.50 in 2016. The minimum tipped wage for restaurant and bar employees would rise to $3.75 per hour from the current $3 per hour.
The House plan offers no automatic cost of living adjustments.
“I consider what we did to be the fairest method for both the employer and the employee,” DeLeo told reporters after the speech.
A separate initiative being pushed by the labor-backed group Raise Up Massachusetts would place a question on the November state ballot to raise the minimum wage from $8 an hour to $10.50 an hour over two years.
The group said in statement that it welcomed DeLeo’s support for a minimum wage increase, but would push to have it indexed to inflation.
The minimum wage has emerged as a key issue at both the state and national levels. President Barack Obama has proposed an increase in the federal minimum wage to $10.10 per hour and discussed the issue in Connecticut last week with New England governors, including Massachusetts Gov. Deval Patrick, who has expressed support for increasing the state’s minimum wage.
By combining the minimum wage and unemployment insurance reforms into a single bill, DeLeo is also taking a different approach than the Senate, which to date has addressed the two issues separately.
The unemployment insurance modifications in the House plan would include an adjusted ratings table that would lower the tax burden for most companies, DeLeo said, and a change from a one-year to three-year average in calculating payroll, a step aimed at avoiding short-term rate fluctuations.
The House is also seeking a freeze in unemployment insurance rates for the fifth consecutive year, the speaker said.
Paul Guzzi, president of the Greater Boston Chamber of Commerce, said employers would be facing a $500 million rate increase without an immediate freeze. Guzzi also praised DeLeo for linking the wage and insurance issues.
“The chamber has indicated that we will support a raise in the minimum wage because for a number of reasons it is the right thing to do,” said Guzzi. “But we connect that support to changes in our unemployment system.”
Some business groups were disappointed, however, because the legislative proposals do not directly address unemployment benefits. The Massachusetts High Technology Council has called for reducing from 30 weeks to 26 weeks the duration of benefits, and requiring that workers be employed for at least 20 weeks, rather than the current 15, before becoming eligible for benefits.
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