Senate OK's minimum wage hike

Senate lawmakers unanimously approved a measure yesterday that would increase the state's minimum wage to $8.25 an hour -- the highest in the country -- and guarantee future increases tied to hikes in the cost of living.

The passage sets up a likely negotiation with the House, where leaders yesterday predicted that a bill calling for a minimum wage increase will pass in some form next month.

The minimum wage is $6.75 an hour in Massachusetts. The Legislature last approved an increase in 1999, voting to raise the hourly minimum wage from $5.25 to $6.00 starting in 2000, and from $6.00 to $6.75 in 2001.

Under the Senate bill, the minimum wage would jump to $7.50 on Sept. 1 and to $8.25 on September 1, 2007. After that, the minimum wage would increase automatically every Sept. 1 to reflect any rise in the urban consumer price index, a measure of inflation in cities across the United States.

House lawmakers are weighing a smaller increase and whether to guarantee future increases as the cost of living goes up. A bill that would increase the minimum wage to $7.75 over two years -- with no tie to future increases in the cost of living -- is before the House Ways and Means Committee.

Four states -- Washington, Oregon, Florida, and Vermont -- have ``indexed" their minimum wage to the cost of living.

``It's time to raise the minimum wage," said Representative Michael J. Rodrigues, Democrat of Westport and Committee on Labor and Workforce Development chairman. ``I think the House will embrace increasing the minimum wage, but not putting it on automatic pilot and indexing it."

It also is unclear whether Governor Mitt Romney, a probusiness Republican considering a run for president, would back the Senate's measure, which was passed as an amendment to next year's budget. Romney has expressed support repeatedly for a minimum wage indexed to inflation, but yesterday his spokesman was noncommittal.

``The budget is usually brimming with all sorts of new laws and policy changes," said spokesman Eric Fehrnstrom, ``and we'll take a good, close look at all of them when the final budget is passed and sent to the governor's desk."

As a candidate for governor in 2002, Romney proposed indexing the minimum wage to inflation and boosting the hourly pay for the state's lowest-paid workers to $6.96 an hour starting January 2004. In March 2005, he was quoted as saying he supported raising the minimum wage to keep up with inflation.

Supporters argue that indexing the minimum wage would help low-paid workers stay afloat in the Bay State, with its escalating cost of living.

``We have a minimum wage that has lost 12 percent of its value since 2001," said Carl Nilsson, spokesman for Neighbor to Neighbor, a coalition of 20 groups that has been lobbying for the change. ``This will make sure that when the cost of food and gasoline go up each year, we're going to have a minimum wage that keeps up."

Business groups have lobbied hard against indexing the minimum wage because it guarantees future increases.

``It's disappointing," said Jon Hurst, president of the Retailers Association of Massachusetts, a group that represents 3,000 retailers and restaurants. ``It's one thing to increase the minimum wage, but to give us the highest in the country and index it not only to the CPI but the urban CPI, makes absolutely no economic sense." An urban consumer price index doesn't take into account prices in other parts of the state, where price increases tend to be less, the critics said.

Small businesses would pass the cost of any increase to their customers, who are leaving the state because they can't afford to live here, he said.

``This is going to increase the cost of a bag of groceries, prescription drugs, day care, or a night out with the family at a restaurant," he said.

The plan would give businesses in New Hampshire, where the minimum wage is $5.15 an hour, a major advantage, he added. ``This is a killer competitively," he said.

Andre Mayer of Associated Industries of Massachusetts said raising the minimum wage hurts teenagers looking for work. ``Its principal effect historically has been to price young people out of the labor market and cost jobs because employers are unwilling to pay very young workers above a certain amount. This is not a significant device for raising the income and living standards of working people and families," Mayer said.

But supporters say raising the minimum wage does not mean fewer jobs.

``One of the criticisms you hear every single time it's been brought up, we hear we're going to lose jobs as a result of it," said Senator Marc R. Pacheco, Democrat of Taunton and the sponsor of the Senate bill that passed yesterday. ``We have not lost jobs. As a matter of fact the job losses that Massachusetts has seen take place over the last couple of years . . . have been lost in sectors that pay above the minimum wage base.

``Every time we've raised the minimum wage, there's been no negative impact," he said.