UPDATED – Get Ready: More Minimum Wage and Unemployment Insurance Talk

After a very slow start in 2014, the minimum wage debate is heating up again.

Tomorrow, U.S. Labor Secretary Tom Perez will be in town to talk about President Obama’s plans to raise the federal minimum wage, and House Speaker Robert DeLeo will be addressing the Boston Chamber of Commerce. The speculation is that the Speaker will be affirming his support for making any increase in the state’s minimum wage contingent on changes to the Unemployment Insurance program that would restrict workers’ eligibility and benefits.

Meanwhile, the Massachusetts High Technology Council, which has been one of the most vocal supporters of changes to the UI system, sent a memo to Legislators yesterday renewing its prior demands for eligibility and benefits cuts, and adding a new one: a two-tier minimum wage, under which only adults would see an increase to $10 per hour and teenagers would continue to earn the current $8 rate. (A quick tutorial on the teen minimum wage is here).

The employer community is also very eager to see legislation passed that would freeze their UI payments for the coming year, blocking a scheduled increase. The Senate included that provision in the UI bill it passed in November, which is awaiting action in the House. The House for its part included it in a supplemental budget passed last month (the Senate did not include the provision in its supplemental budget). Today, the House and Senate agreed on a compromise budget, which will be on the Governor’s desk soon, and the employers are undoubtedly dismayed to see that the freeze was not included.

The suspense builds…

UPDATE: March 13, 1:00 PM. From the Speaker’s remarks today (text of his prepared remarks is here:
Minimum wage proposal:
$9.00 on July 1, 2014
$10.00 on July 1, 2015
$10.50 on July 1, 2016
No indexing to inflation.

Tipped minimum wage proposal:
$3.00 (presumably on July 1, 2014)
$3.35 (presumably on July 1, 2015)
$3.75 (presumably on July 1, 2016)
No indexing to inflation.

Lower minimum wage for teenage workers not mentioned.

UI Proposal:
The changes the Speaker mentioned in his address to the Boston Chamber do not include either of the significant changes to eligibility or benefits being advocated by employers (reduction of maximum duration of benefits from 30 to 26 weeks; increase in amount of time needed to work to qualify for UI from 15 to 20 weeks). His proposal would freeze the UI rate for the coming year (which is pretty universally agreed upon), and appears to adopt some version of the Senate’s reworking of employer costs so that employers whose employees collect UI frequently would pay more than employers whose employees collect less often. His proposal does not appear to increase the amount of wages on which employers pay UI taxes, as the Senate bill does, which would leave the UI financing system vulnerable to being underfunded. The Speaker’s proposal also includes some changes to reduce UI costs for cities and towns (not for employers generally) that Governor Patrick recommended in January.

Overall, it’s hard to imagine that the Massachusetts High Technology Council and other employer groups are thrilled with this proposal (but the Senate bill is still a better approach).

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s