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Minimum Wage Hike Bad For Massachusetts

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The Massachusetts legislature will be considering raising the minimum wage in the upcoming session from its current $8.00 per hour to $11.00 per hour. The State Senate has already approved the bill and the House will consider it soon.

According to one state senator, Mark Montigny (D-New Bedford) there are currently “tens of thousands” of people living in Massachusetts who are working full time and still fall below the poverty level. Of course even the federal Bureau of Labor Statistics (BLS) refutes this fact in a 2010 study. According to its study (link below) only 4.7% of minimum wage workers are over 25 and working full time to support a family. Most minimum wage workers actually still live at home or only work to supplement their family’s income. Going again to the BLS, their numbers show only 62,000 minimum wage workers in Massachusetts below the federal poverty level; however this study does not show how many are supporting families. If we use the percentages in the first study, we can assume there are not tens of thousands of families in poverty because they are working at or below minimum wage.

But leaving that aside, many other studies also show a raise in the minimum wage will actually hurt the very people it is supposed to help, lower skilled workers and those just entering the labor force. Employers will resort to various actions including not hiring new employees, only hiring employees who are already skilled instead of those with no skills as replacement workers, decreasing fringe benefits and reducing hours.

According to the Massachusetts Budget and Policy Center, a liberal research group supporting the increase, two things will happen if the minimum wage is increased. According to their spokesperson, Noah Berger, people who don’t make enough to pay for the basic necessities will hurt businesses because of a lack of demand. The other point they make is raising the minimum wage will lift all other wages proportionately, helping everyone. Both of these statements have never been proven to be true. After all it is no secret raising wages will increase costs to the business, cutting into profit, and this will need to be made up somewhere. One can argue this increase should come from the business owners but many minimum wage workers are employed by small, independent businesses, who can least afford these increases. If the increased costs associated with these wages don’t result in cutting labor they will result in increased prices throughout the supply chain, causing prices to rise. Those who can afford it, the mega companies like Wal-Mart will not be hurt; only the small independent businesses will feel it. These same businesses cannot absorb the cost of increasing all other wages a well for the same reasons.It seems rather funny how those advocating for a higher minimum wage also bemoan the fact companies like Wal-Mart have their good manufactured by slave labor in China yet force them to do so by their policies.

Businesses, especially small businesses, in Massachusetts are already hurting from the effects of poor government decisions and over regulation. They cannot afford to have yet another burden placed upon them. If the minimum wage is raised, it will only hurt these businesses, as well as everyone else in Massachusetts. Businesses will close or move to more business friendly states, unemployment will increase and prices will go higher. Is this truly in the best interest of Massachusetts? You should contact your state legislator and ask them to vote no on raising the minimum wage.

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Sources:

Bureau of Labor Statistics – Characteristics of Minimum Wage Workers

MassLive: Massachusetts Senate Overwhelmingly Approves Minimum Wage Increase

Bureau of Labor Statistics - Massachusetts

Forbes: The Minimum Wage Delusion

Globe: Deleo Wary of Minimum Wage Hike

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