(Image via fieldfirst.com)
Staff Writer: Jesse Magnifico
Email: jmagnifico@umassd.edu
Senator Jason Lewis, other legislators, and the Raise Up Massachusetts Coalition are advocating for another minimum wage increase to $20 by 2027.
If passed, the increase would make the Bay State have the highest minimum wage in the country.
A bill passed in 2018 has gradually bumped the minimum wage to $15, which took full effect on January 1st of this year; however, more is necessary to alleviate the expensive realities of living in Mass. Lewis and accompanying legislators are pushing for a higher wage to better match the cost of living.
The increase is projected to benefit many in Massachusetts. In a July 2023 report published by the state’s Budget and Policy Center, roughly a third of wage-earners (nearly 1 million workers) could see salary raises. Of these 1 million workers, more than half of full-time workers (56%) would receive pay increases. Also, minority groups (women and people of color) would receive raises (58% and 40%, respectively).
The proposal includes city and town (municipal) workers who are currently exempt from minimum wage laws in the state. It would also place the tipped minimum wage closer to the current $15 minimum wage. Service workers who earn tips would see an increase of $6.75 to $12 by 2027.
A wage increase is needed more now than ever because of inflation.
Massachusetts is nationally ranked among the most expensive states to live in. A calculation of living expenses across all fifty states by Now Patient has gathered the average monthly costs of gas, groceries, and health insurance. After punching in the numbers, Massachusetts sits at number five, one tier above California.
The Consumer Price Index of the Boston area is also among the highest across the nation. Last updated October 12, 2023, the CPI has steadily inclined from January 2020 to September 2022, jumping from 0.5 to 8.1. Food prices alone have spiked 5% since last year.
According to Now Patient’s data, it costs, on average, $3.55 per gallon for gas, $406.21 for groceries per person, and $553 for health insurance. Of course, this information varies depending on the cost of living in an area.
And that is critical to determining the living wage.
What hasn’t been discussed, one of the most important aspects of the conversation is housing.
The rule of thumb is that one-third (30%) of your income goes toward rent and housing expenses. Considering the $20 minimum wage is in effect, full-time 40-hour workers would make $3,200 a month without taxes. One-third of $3,200 is $1066.67.
Factor in taxes, health insurance required by Massachusetts law, the fact that minimum wage jobs do not regularly schedule workers full-time, and also that they do not offer competitive benefits (e,g., health insurance, sick leave, paid family leave, PTO), that number dwindles significantly below the golden one-third ratio.
We’re looking at less than $200 a week to survive on, if even.
Rob Stevens, a minimum wage worker at Starbucks, appeared on GBH to explain that $15 an hour is not liveable. “The health insurance is so much that I can’t afford copays, so I just go without seeing a doctor. These are the sacrifices we’re making.”
Minimum wage workers, especially college students who live off-campus, don’t have a lot of wiggle room for other expenses and commodities. The 2008 recession and housing market crash are cited as the dawn of serious degree inflation, which has caused the cost of college nationwide to keep on climbing every year.
As average college prices have increased 169% from 1980 to 2020, wages have not kept up. Worse, the Education Data Initiative illustrates that after adjusting for currency inflation, tuition has increased 747.8% since 1963.
Yikes.
“It’s definitely a struggle because you’re a college student,” Christian Augat, HR Management major and commuter, explains. “You rack up as much money as you can during the summer, and then you live off of that until winter break.” He has moved from his childhood home in Cape Cod to North Dartmouth to attend UMass Dartmouth.
Emma Bowser, fellow volunteer writer for the Torch, piped in: “It’s difficult to manage finances while You’re in college. Most students don’t have a lot of experience paying bills or doing their own taxes, and it’s especially stressful in college because it’s your chance to prove that you’re a responsible adult that deserves a good education like everyone else.”
College students and the UMass Dartmouth community are excited about the potential of a $20 minimum wage increase.
The average rent in Mass is $3,000, according to Zillow, a real estate listing site. Boston is the city mostly responsible for the high cost at an average of $3,405 since the beginning of 2023.
More specifically, according to listings on Zillow, the monthly rent of communities surrounding UMass Dartmouth are as follows:
– Fall River: $1200 – $2,300
– Dartmouth: $2,200 – $5,500
– New Bedford: $1,300 – $2,400
– Westport: $1,300 – $2,500
“In this economy, I would not be able to survive without the help of my parents,” Roxanne Hepburn, the commuting Torch Editor-in-Chief mentions. She lives with two roommates in New Bedford. “It is hard to make ends meet sometimes. It makes graduating college very intimidating.”
$20 is better than $15, but $20 is nowhere near the living wage.
MIT has thoroughly calculated typical expenses in Massachusetts. They consider specific circumstances of household size, family size, how many adults work in a household, and the costs of various expenses. For a one working adult, one-person household: $21.25/hr or more is necessary.
$20 is at least a better starting point.
The wage increase is not without its shortcomings. The rise is expected to do more harm than good and could lead to poor economic output and lower employment levels.
A good portion of businesses in the state are opposed to the raise. In a May 2023 study sponsored by the National Federation of Independent Business (NFIB), opponents argued that the wage increase would raise labor costs for many businesses. While it may increase product sales, the rise could decrease Massachusetts’s economic competitiveness and drive prices for consumer goods upwards.
Small businesses in Massachusetts would be the most affected by the wage raise.
According to Jon Hurst of the Retailers Association of Massachusetts, thousands of businesses closed due to issues during the pandemic, ranging from increased supply chain and labor costs to quarantine restrictions. With inflation and interest rates on the rise, the increase in the minimum wage would severely harm struggling small businesses unable to absorb increased payroll costs.
The proposed bill has garnered mass interest from the citizens living in the Bay State. According to a poll created by MASSterList, more than half of voters (59%) approve of raising the wage, while a third (33%) oppose the increase.
Of those in favor, women make up the majority, with 69% of female voters expressing their interest in raising the wage, while only 21% oppose it. On the other hand, male voters are split nearly 50:50 on the decision (48% yes, 46% no).
The Democratic party seems to be in higher favor of raising the wage, with 64% of voters citing their approval.
According to Democratic strategist Doug Rubin, the Republican Party is not in favor of raising the wage, compromising only 26% of GOP voters. While drastically less than Democratic voters, it is also less than the 42% of GOP voters unaffiliated with any political party.
While the majority of Mass favors the wage increase, different regions express different levels of support.
The Boston region yields the largest support, with 65% of voters. The South Coast follows in second place with 60% of voters, while 56% of North Shore residents express their approval. The state’s more conservative regions garnered the least amount of support, with only 51% of voters there giving their approval.
Still, the fact that percentages lie at more than half of voters supporting the bill, it looks promising that the bill will pass. It is just a matter of figuring out how small/local businesses and business costs will change business practices to cater to the gradual wage increases.