Lawmakers are pondering another minimum wage hike. How would it affect Quincy businesses?

QUINCY − When Calli McPherson opened William James Gifts in August 2020, the minimum wage in Massachusetts was $12.75.

Flash forward to 2023, and McPherson said the recently increased minimum wage to $15 per hour didn't overly affect her bottom line. But a new bill that hopes to push the hourly rate to $20 would require a little more financial finagling.

“We can keep up, but we would have to make adjustments throughout our business to account for that," McPherson, who pays her three part-time employees more than the current minimum wage, said. "Some of it would get passed on to our consumers, but we would also try to absorb some of the cost in our business as well."

A new bill filed by state Sen. Jason Lewis, D-Winchester, would increase the minimum wage from $15 to $20 for most workers, and would increase the hourly rate to $12 for tipped employees. Lewis said the bill would help Massachusetts residents make a livable salary.

“If you look at the MIT living wage calculator, to have a living wage for a single person living in the greater Boston area, you need to be earning $22.59 an hour," Lewis said. "There is still a big gap between the minimum wage and the living wage. If somebody is working full time, they should expect to be paid by their employers to cover the necessities of life."

For Norfolk County, which includes Quincy, Weymouth, Braintree, Randolph, Milton and Cohasset, a single person with no children needs to earn $24.05 an hour to achieve a living wage, according to the calculator.

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Bill pushes for minimum wage to rise with inflation

One of the bill’s biggest supporters is the group Raise Up Massachusetts, which has been fighting for an increase since the state's minimum wage was $8. The group says the most recent bill includes a key component: The wage would be tied to inflation once it hits the $20 mark.

“Part of this bill would, once the wage reaches $20 an hour, set it to rise with inflation. So it would go up, in a lower inflation year, a few cents. In a higher inflation year, it would increase more but you would see those gradual increases that businesses can plan around,” said Andrew Farnitano, a spokesperson for Raise Up Massachusetts.

Phineas Baxandall, policy director for the Massachusetts Budget and Policy Center, agrees, noting that 19 states, including some of Massachusetts’ neighbors, have tied the minimum wage to inflation.

“It makes sense," Baxandall said. "The same way we see our Social Security benefits and the earned income tax credit increase with inflation, it depoliticizes what should be an obvious measure, which is essential for people who are trying to get by with moderate income."

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Some lawmakers, including state Rep. Tackey Chan, D-Quincy, are taking a wait-and-see approach.

“It seems to be the way it works is that once we hit the target, you file a bill immediately to change the target again without seeing what the impacts are on having the minimum wage shift,” said Chan. “We’ll wait and see how it goes. Right now, we have a pro-labor market with the highest wage growth in two years.”

Chan said Federal Reserve data out last month shows wage growth moderately holding on. The January jobs report showed average hourly wages increasing 4.4% year over year, but that is still lower than the 6.4% inflation number from January 2022.

Business owners split on plan to raise minimum wage

Bill Rennie, the vice president of the Retailers Association of Massachusetts and a South Shore resident, said businesses have gone through a lot in the last few years.

“We just hit $15 on Jan 1, 2023. That gives us one of the highest wages in the nation. We are higher than all our neighbors and, when you are a regional outlier, that creates a problem. Given the pandemic, what our businesses have gone through, we just think it’s not the right time to mandate another direct cost increase to local employers,” said Rennie.

The gradual increases cited in the bill would give businesses time to adjust to the labor change, the general manager of The Fours sports bar in Quincy said.

“I think when it comes to costs over the last couple years, fluctuations in our food supply, the prices on different products, the availability on different items had more of an impact on how we manage our pricing than our exact cost of our labor, even though that has gone up a little bit," Tim Colton, the general manager, said. "Relative to other fluctuations of other costs, I’d say that is probably a secondary concern for us."

So far, top Democrats in the State House have been silent on the bill and Gov. Maura Healey skirted the question last time she was asked if she'd support an increase.

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This article originally appeared on The Patriot Ledger: Quincy business owners talk impacts of raising minimum wage to $20