BOSTON (AP) — Lower-paid workers in Massachusetts are looking forward to a small hike in the state’s minimum wage, but not all businesses are cheering.
On New Years Day, the minimum wage in Massachusetts will increase from $12 an hour to $12.75. The rate will continue to bump up each year until it reaches $15 in 2023.
The higher minimum wage will put added economic pressure on local businesses, according the National Federation of Independent Business.
Christopher Carlozzi, the group’s state director in Massachusetts, said the wage hike is just one factor among many adding to the cost of doing business in Massachusetts, including health care and energy costs and higher payroll costs as a result of the state’s new paid leave mandate.
“There are constantly additional costs which make it very difficult for many small businesses to keep afloat, create new jobs, and remain competitive,” Carlozzi said, warning that as the wage approaches $15 an hour, some businesses could cut jobs.
He pointed to studies that suggest entry-level jobs could also be eliminated and some businesses may replace workers by investing in automation, such as self check-outs and ordering kiosks. He said other costs — including proposals to increase the gas tax or impose congestion pricing — could also add to the overall fiscal burdens of business owners.
“There is a tipping point for small businesses as government mandates and fees pile up,” he said.
But advocates who pushed for the higher wage say lower-paid workers are struggling to make ends meet. They say about 420,000 low-wage workers in Massachusetts will get a raise as a result of the increase.
The group Raise Up Massachusetts collected the thousands of signatures needed to put the wage hike on the 2018 ballot. In June of that year, before voters could weigh in, lawmakers approved and Republican Gov. Charlie Baker signed legislation increasing the wage.
“With every minimum wage increase, hundreds of thousands of working people in Massachusetts have more money in their pockets to put food on the table, pay their bills, or save for an emergency,” said Cindy Rowe, Executive Director of the Jewish Alliance for Law and Social Action and a member of the Raise Up Massachusetts steering committee.
Advocates pointed to the liberal leaning Massachusetts Budget and Policy Center that found the minimum wage increase will result in a total increase in wages in 2020 of about $410 million. Roughly 89% of workers affected by the raise are adults, 60% are women, and 40% are people of color, the center also said. The group said 61% of tipped workers will see their wages rise.
Democratic Attorney General Maura Healey said her office is dedicated to ensuring workers are paid for every hour worked. Healey said her office collaborates with local groups to host free wage theft clinics.
Massachusetts isn’t alone in raising wages. Twenty other states will also see an increase in their minimum wage in 2020.
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