Minimum wage in Mass. just increased to $15. Now a group is pushing for $20 by 2027

BOSTON — The $15 per hour minimum wage that took effect Jan. 1 in Massachusetts was years in the making.

Now, with the new rate just setting in, a coalition has set its sights on making Massachusetts the first state in the country to move to $20 an hour.

Members of the Raise Up Coalition, an influential constellation of organized labor and community groups, will press lawmakers to support legislation proposing four annual minimum wage hikes to bring the standard rate up to $20 by 2027, while nearly doubling the separate minimum wage for tipped workers to $12 an hour.

The proposal, which has already generated opposition from at least one industry group, will spark new debate about an appropriate wage floor and impacts on businesses.

That discussion is likely to be supercharged by the high cost of living in the Bay State, lingering pandemic-era strains on workers and employers, and a menu of tax relief measures business leaders say are important to the state's competitiveness.

"In 2018, when we passed the law to increase the minimum wage to $15 an hour, I think even then we knew $15 an hour would certainly help a lot of lower-income families and households in Massachusetts, but that that would still be below what's really needed for a living wage," state Sen. Jason Lewis, who filed a version of the $20-an-hour bill, said. "The impact of unexpectedly high inflation in the last couple of years — that has really eaten away at the purchasing power of a $15 minimum wage."

Lewis's bill, plus a nearly identical bill filed in the House by Democratic state Reps. Tram Nguyen of Andover and Daniel Donahue of Worcester, call for raising the general minimum wage $1.25 an hour each year until it reaches $20 in 2027.

CPI driven increase

The wage would then be linked to the consumer price index for urban wage earners and clerical workers starting in 2028 so it automatically rises alongside inflation.

Both bills would raise the minimum wage for tipped workers each year, landing at $12 per hour in 2027, then link it to the same consumer price index the following year.

A spokesperson for the Raise Up Coalition said the groups are "urging legislators to co-sponsor" the Lewis and Nguyen-Donahue bills.

"From 2013 to 2018, Raise Up Massachusetts worked to bring the statewide minimum wage closer to a living wage, and we're proud of our work to win the current $15 minimum wage," the spokesperson, Andrew Farnitano, said in a statement. "That wage, however, is by no means a living wage in our wealthy and expensive state. In fact, over the past year the minimum wage has failed to keep up with the rapidly rising cost of living.

"According to the federal Bureau of Labor Statistics, it took nearly $18 in November 2022 to buy what $15 bought in June 2018."

The group has neither committed to nor ruled out pursuing an initiative petition, a step that could put the topic before voters in 2024. And while Farnitano confirmed the coalition supports the already-filed $20-an-hour legislation, he said its members are "consulting with low-wage workers and experts to determine the ideal level for the minimum wage in the current economic climate."

Strong opposition among retailers

Five years ago, when a series of Raise Up-backed proposals were set to make the ballot, lawmakers and then-Gov. Charlie Baker enacted the so-called "grand bargain" law that increased the state's minimum wage from $11 to $15 via a series of annual hikes, implemented a paid family and medical leave program backed by a payroll tax, required an annual sales tax holiday weekend, and phased out a requirement for workers to earn time-and-a-half pay on Sundays.

Jon Hurst, president of the Retailers Association of Massachusetts, agreed as part of that deal to drop a ballot question his group backed that would have reduced the state's sales tax from 6.25% back to its old rate of 5%.

Now, facing the prospect of renewed debate on another batch of minimum wage increases, Hurst said he "strongly" opposes the latest measure.

"We just went through the grand bargain increases. We just hit $15 as of Jan. 1. We are the third-highest minimum wage in the entire country, trailing only California and Oregon. No state in our region is remotely close to us, to Massachusetts," Hurst said. "I get it, politically. This is an automatic political issue every five years or so, by special interests with very deep pockets.

"But given what has happened to our main streets and to our small businesses, we need to give them recovery time before we make their futures even more bleak."

Supporters point to the sky-high costs of housing, child care and other necessities in Massachusetts as justification for another minimum wage increase.

Living wage tool suggests otherwise

Lewis cited a "Living Wage" calculator tool published by the Massachusetts Institute of Technology that put the wage needed for an individual working full time to support themselves in the Boston-Cambridge-Newton metropolitan area at $22.59 an hour.

Asked whether he agrees that the region's cost of living justifies a further minimum wage increase, Hurst replied, "I 100% don't buy that."

He offered his own set of data comparing the state's minimum wage — which lawmakers have previously declined to link to inflation − to changes in the Consumer Price Index. If the statewide minimum wage increased at the same rate as the Consumer Price Index starting in 2002, Hurst said, it would be about $10.98 an hour today.

"It's time that Beacon Hill starts looking at how can they alleviate costs for small businesses, not add to their pain and misery and pushing them over the edge toward closing their doors," Hurst said.

No other state has a $20 minimum wage or legislation on the books to reach that threshold.

The $15-an-hour wage in Massachusetts that took effect Jan. 1 ranks fourth-highest among states and territories, trailing Washington, D.C. ($16.10), Washington state ($15.74) and California ($15.50), according to data tracked by the Economic Policy Institute.

When it comes to the tipped minimum wage, Massachusetts is far closer to the middle of the pack with $6.75 an hour required.

Top Democrats have not indicated where they stand on the issue. Neither House Speaker Ron Mariano nor Senate President Karen Spilka responded to requests for comment Tuesday.

This article originally appeared on MetroWest Daily News: Coalition pushes $20 minimum wage in Mass. by 2027