Massachusetts Sets Nation’s Highest Minimum Wage – Real Time Economics

Massachusetts Gov. Deval Patrick set the highest minimum wage in the country Thursday when he signed a bill that would lift the state’s pay floor to $11 an hour by 2017.

Massachusetts will reach the level—50% higher than the federal rate–in three steps of $1 increases. The new law supplants Vermont as the state set to have the highest wage floor. Legislators there earlier this month approved raising the state’s minimum wage to $10.50 an hour by 2018.

“Raising the minimum wage brings a little relief to the working poor, many of whom do jobs we could not live without and who recycle money right back into the economy,” Gov. Patrick said in a statement. “We show the nation that opportunity can and must be spread outward, not just upward.”

The bill passed the legislature despite opposition from the state’s restaurant association and other business groups.

“It’s extremely frustrating,” said Erin Calvo-Bacci, owner of Bacci Chocolate Design, a small candy maker in Swampscott, Mass. The company will no longer hire part-time high-school students to help during busy seasons because those workers lack enough experience to justify an $11 wage, she said.

The Bay State is the ninth to approve a minimum wage increase this year and the fifth to match or exceed $10.10 an hour, a rate endorsed by President Barack Obama. Efforts for a federal increase have fizzed this year in Congress.

The wave of increases, generally in liberal-leaning states, creates a dichotomy in the country where some jurisdictions will have vastly different wages rules than others. Barring a change in federal law, in three years there will be at least a $3.75 an hour spread between the state with the most generous minimum wage and those still following the national mandate.

The federal minimum wage is $7.25 an hour. Washington state, at $9.32 an hour, has highest current state wage floor.

In addition to lawmakers passing increases, several states have wages tied to price increases. Based on Congressional Budget Office inflation projections, Washington’s wage is estimated to be $9.92 an hour in 2017. And by that year some Seattle employers will be required to pay $15 an hour, under city law.



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