The Wages of Compromise on Beacon Hill
By Scot Lehigh
RAISING THE state minimum wage is once again a hot topic on Beacon Hill, but this question looms: Will the push be a consensus effort backed by a broad coalition or become the subject of a pitched business-labor battle?
Let’s set the table. The state’s base wage has been at $8 an hour since 2008. Despite an unemployment rate of 7.2 percent, there’s a feeling among many Democrats that the economy has improved enough to allow for an increase.
That said, there’s a good deal of disagreement about how big that increase should be.
A labor-backed coalition is pushing a ballot question for 2014 that would hike it to $10.50 an hour over two years. Substantial sectors of the business community, meanwhile, are open to an increase of some sort, with one big if: They want any such legislation to include changes to the state’s unemployment insurance program.
The business community’s concerns about the UI program are basically three. First, one need only work 15 weeks to qualify for benefits, rather than 20, as is the case most everywhere else. That means people who take what are clearly meant as seasonal positions are eligible for unemployment benefits when those jobs end. Second, Massachusetts pays 30 weeks of benefits as opposed to 26, the maximum in 48 other states. Those features help make the program one of the most expensive in the nation. Finally, companies with low-layoff records end up subsidizing firms that have much higher layoff rates.
Business has long considered the state’s UI program in serious need of repair, but previous overhaul efforts have gone nowhere. Thus private-sector leaders have a big incentive to accept a minimum wage hike if by doing so they can finally achieve some cost-reducing reforms in the insurance program.
Indeed, Chris Anderson, president of the Massachusetts High Technology Council, says that “a majority of our members would support raising the minimum wage to $10 an hour if the same legislation included UI reforms.”
The original expectation had been that the House and the Senate would link the two issues. This week, however, the Senate broke ranks by voting to raise the base wage to $11 an hour by 2016.
Still, with Senate President Therese Murray expected to depart around the turn of year, and a lightly engaged Governor Deval Patrick leaning into lame-duckdom, the key player on Beacon Hill will likely be House Speaker Robert DeLeo.
DeLeo, who drove the important municipal health care reform of 2011, is determined that any minimum-wage legislation also include UI reform.
“What I don’t want to hear, quite frankly, is one side telling me that this is what we ought to do on UI or this is what we ought to do with the minimum wage, but not come to the table or have any discussion about the other issue,” DeLeo noted to me this week. “If people are going to do that, then their issue isn’t going to get too far.”
DeLeo’s position leaves organized labor in a tricky position. If labor works with DeLeo and his lieutenants for a consensus package, that could ensure a minimum wage hike, but at the cost of paring back the state’s (too) generous UI benefits.
Contrariwise, labor could snub the speaker and try to win at the ballot, but that’s a less certain route, particularly if the business community were to mobilize against the ballot question.
So what’s the president of the Massachusetts AFL-CIO, a key member of the ballot-question coalition, to do?
Steven Tolman seems torn. On the one hand, he professes respect for DeLeo and says that “time has a way of working these things through.” But in the very next breath, Tolman notes that “we are not afraid to go to the ballot” and asks, “Why do we have to tie the effort to help those earning the minimum wage to diminishing the benefits that help the unemployed?”
The broad answer to that question is that job seekers would also benefit from a reform that improves the state’s business climate and thereby promotes job creation. Further, after the bluster and bombast of the Bob Haynes years, a compromise package would help rebrand the AFL-CIO as a more reasonable, far-sighted, savvier union.
The right path here is clear. Will labor take it?