Minimum Wage Increase: Negotiations Begin in Earnest

[Update, November 20: The Senate voted 32 to 7 to pass its minimum wage bill yesterday. By tradition, the Senate President does not often vote, so Senate President Murray’s decision to vote yes on this bill gives it her personal endorsement. The Senate adopted an amendment to include a raise for tipped employees (making the Senate bill even more similar to the ballot initiative) and rejected amendments to establish a lower minimum wage for teenagers and to reduce or delay the minimum wage increase in various ways. Voting against passage of the bill were Republicans Hedlund, Ross and Tarr and Democrats Donoghue, Connor Ives, Richard Moore, and Rodrigues (the total of 39 votes cast reflects one vacancy, which will be filled today by Republican Donald Humason).]

Let’s drop in on a poker game going on in the Legislature: the question of raising the minimum wage.

A minimum wage increase is one of many ballot campaigns underway this cycle, but it’s the one the Legislature is paying the most attention to. And the first milestone for getting initiative petitions on the ballot — submitting the signatures of 69,000 or so voters across the state — is this Wednesday.

The State Senate, probably acting in response to reports that this ballot petition effort is virtually certain to submit far, far more than the required number of signatures, announced that it will vote on its own minimum wage proposal tomorrow — the day before.

If you favor a minimum wage increase, the Senate bill is better than the ballot petition in some respects and worse in others. It raises the minimum wage sooner and to a higher figure ($11 versus $10.50) than the ballot question. But, unlike the Senate bill, the ballot question also increases the minimum wage that tipped employees receive.

Tipped employees receive a much lower minimum wage than the current $8 per hour rate, on the theory that tips are their primary source of income. The minimum wage for tipped employees is $2.63 per hour. Employers are required to ensure that these employees earn — between their hourly wage and their tips — at least the $8 minimum wage. But the minimum wage for tipped employees has been $2.63 since 1999, and with every increase in the regular minimum wage, their income falls further behind.

Business interests reacted with surprise and alarm at the Senate’s announcement (even though the Senate President has repeatedly said that a minimum wage increase is on the agenda this session). Restaurant owners are particularly fearful that an amendment to include the tip increase will be adopted during tomorrow’s debate. The Senate Republicans, who back the business interests, would like some substantial concessions, like a special — lower — minimum wage for teenagers and changes to the unemployment insurance system reducing business costs. It will also be interesting to see if they propose the alternative to a minimum wage increase that’s been endorsed by putative 2014 GOP standardbearer Charlie Baker — a “turbocharged” state earned income tax credit program for low-income families.

Stay tuned here late Tuesday or early Wednesday for details about the outcome of the Senate debate.

Going into 2014, with the Senate having already passed a minimum wage increase, the House will then have its turn. It may be that the Legislature can pass a law satisfactory enough to convince the petition backers to drop their plans to put the issue on the ballot. But if no deal has been reached by May 7, 2014, the petition backers will have a few weeks to collect an additional 12,000 or so signatures. If they’re successful, their proposal (and any lesser alternative that the Legislature might agree on) will be on the statewide ballot in November.

We’ll have some idea how strong a hand the petition backers are holding when they submit their signatures on Wednesday. The Senate appears to think it’s something considerably better than, say, a pair of fours.

The last time the Legislature passed a law increasing the minimum wage was in 2006, during the last year of the Romney administration. Governor Romney countered with a much smaller increase, and after the Legislature rejected that idea, he vetoed their bill. When the veto override was taken up, every Republican — in both the House and the Senate — voted against the Governor. That’s some idea of how much all legislators want to be on the right side of this issue next November.

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