June 6, 2005
minimum wage would destroy jobs, reduce state's competitiveness
- A study released today by The Beacon Hill Institute at Suffolk University
shows that a proposed increase in the state minimum wage would lead
to the destruction of 26,970 jobs, the preponderance of which would
be among low wage workers, women workers and workers 20 and older. It
would also raise consumer prices and, in doing so, reduce the ability
of state businesses, particularly businesses located near the New Hampshire
border, to attract customers.
increase is contained in a bill sponsored by state Representative J.
James Marzilli. The bill would increase the Massachusetts minimum wage
in two stages, from $6.75 per hour to $8.25 per hour. The bill would
also index the minimum wage to consumer prices and provide for a commission
to consider further increases in the minimum wage to "reflect existing
economic conditions in the Commonwealth."
would benefit workers who are able to keep their jobs. The wages of
those who would be paid at the new minimum wage would rise by $405 million.
But those additional wages would be largely offset by $371 million in
wages lost by the workers who, as a result of the higher minimum wage,
ended up unemployed.
points out that high Massachusetts labor costs are already taking their
toll on state competitiveness. At $6.75 per hour, the existing Massachusetts
minimum wage is 31% greater than the New Hampshire minimum wage of $5.15
per hour. Under the time-and-a-half requirement of the state "blue
laws," the Massachusetts rate increases to $10.13 on Sundays, almost
double the New Hampshire rate.
"This shows why, in recent years, Massachusetts has lagged behind
New Hampshire in both the hospitality and leisure sector and the retail
sector," says David G. Tuerck, Executive Director of the Institute
and a co-author of the study.
"Once the increase in the minimum wage sought by Representative
Marzilli is fully implemented, the lowest Massachusetts wage rate will
be 60% greater than the lowest New Hampshire wage rate on weekdays and
140% greater on Sundays. What is left of the retail sector in places
like Lawrence, Lowell and Haverhill will complete their migration to
low-wage and sales-tax-free places like Salem, New Hampshire."
is available online at http://www.beaconhill.org. The study received
partial support from the Retailers Association of Massachusetts. The
Beacon Hill Institute is solely responsible for its content.
study is available at http://www.beaconhill.org/BHIStudies/H3782MinWage62005.pdf
6/27/05 10:52 AM