Romney says keeping minimum wage low preserves jobs for poor

BOSTON --Gov. Mitt Romney said Tuesday he is opposing a legislative proposal to raise the state minimum wage to $8 per hour because while it would increase pay for roughly 250,000 of the poorest workers in Massachusetts, it might also end up costing them their jobs.

"I think it would be great if everybody could earn very high levels of compensation, but the challenge with raising the minimum wage excessively is it is a hurt to those that are entering the work force, the very poor, those that are trying to get early jobs, get those first jobs," the Republican chief executive told reporters in his first public appearance since seeking to amend the legislation late Friday.

"I have spent hours reading a wide array of reviews on the minimum wage and it's impact on the economy, and there's no question raising the minimum wage excessively causes a loss of jobs, and the loss of jobs is at the entry level," Romney said.

The comments contrasted with his 2002 gubernatorial campaign, when Romney not only proposed increasing the state minimum wage from $6.75 per hour to $6.96 per hour, but also virtually ensuring annual increases by linking the minimum wage rate to changes in the inflation index, commonly known as the consumer price index.

Romney touted that proposal in a PowerPoint presentation and on his campaign Web site, and said at the time that indexing future wage hikes would create wage predictability for employers. Now, after deciding against seeking a second term, and as he lays the groundwork for a potential 2008 presidential campaign, Romney conceded he has revised his views.

The governor instead favors raising the minimum wage to $7, effective Jan. 1, 2007, and then reviewing the rate every two years based not only on the consumer price index, but other data such as the state unemployment rate, jobless rate and the minimum wage of competing states. Increases would not be guaranteed, only subject to recommendation by administration officials to the governor and Legislature.

Asked if that was different from his 2002 campaign promise, Romney said: "It's more expansive and comprehensive."

Minimum wage advocates accused him of a political flip-flop as he seeks to align himself with national Republicans including President Bush, who have opposed increasing the federal minimum wage from $5.15 per hour by arguing it could trigger job loss among entry-level workers.

"He's simply shedding a promise as he kowtows to the radical right,'" said Rep. James Marzilli, D-Arlington, who has been crafting the legislative minimum wage proposal. "There is a great body of study that indicates modest increases have little or no impact on employment. There's even academic work that indicates states with the highest job growth in the past decade are those that have had higher minimum wages than the national average."

Noah Berger, executive director of the Massachusetts Budget & Policy Center, a nonprofit group that has been advocating a minimum wage increase, cited a May 2005 statement signed by 58 Massachusetts economists -- including Nobel Prize winner Robert Solow of the Massachusetts Institute of Technology -- that rebutted Romney's job-loss concern.

"To the contrary, an increase in the minimum wage will raise purchasing power and could yield other distinct benefits for Massachusetts businesses, such as reduced turnover and lower training costs," the economists said in their statement.

Lt. Gov. Kerry Healey, the Republican gubernatorial nominee, has already broken with Romney over the issue, saying she did not believe in wage indexing despite campaigning for it in 2002. She also said she favors increasing the state's minimum wage to "somewhere around $8" per hour.

Christy Mihos, an independent gubernatorial candidate whose family created the Christy's convenience store chain, employer of many low-wage workers, said he opposes increasing the state minimum wage from its current $6.75 per hour, but would favor annual increases based on inflation.

"I start my employees at $8 an hour," Mihos said in a statement. "All good employers will pay whatever they have to hire and retain good employees. Minimum wage fights are just a distraction."

Chris Gabrieli, a former venture capitalist now running for the Democratic gubernatorial nomination, said he favors not only increasing the minimum wage to $8.25 per hour, but also indexing future increases.

"A real minimum wage increase is long overdue and 25 cents doesn't get it done," he said in a statement, jabbing at Romney's proposal.

The other two Democrats running for governor, former Clinton administration official Deval Patrick and Attorney General Tom Reilly, have also said they support increasing the minimum wage. Reilly favors indexing it; Patrick supports indexing, subject to legislative review.

On Monday, the House voted to reject Romney's proposed changes. The bill was then sent to the Senate for its response. Should it return to Romney, he would then have 10 days to sign, veto or let it become law without his signature.