DeLeo Resists Call to Divorce Minimum Wage From Insurance System Changes
By Colleen Quinn and Michael Norton
State House News Service
Despite calls from prominent Democrats to separate the issues, House Speaker Robert DeLeo has not swayed from his plan to tie an increase in the minimum wage with unemployment insurance system reforms sought by businesses.
“I am still of that mind,” DeLeo told the News Service Tuesday after an event at the State House. “I have not changed my mind.”
Asked about a “sub-minimum wage” for teenagers and workers in training that would be lower than the regular minimum wage, DeLeo said he is considering that idea.
Rep. Kevin Kuros (R-Uxbridge) filed a bill (H 1743) after hearing from employers who are hesitant to hire teenagers at the same wage as adults. Under the bill, teens could earn 25 percent less than the minimum wage, which is currently $8. Critics of the idea argue it would hurt some teens who work to support their families.
“I’ve heard from some of the ice cream places, who are saying if they are forced to have a higher wage they may have to, you know, cut employees,” DeLeo said. “On the other hand, we want to make sure they get a fair wage as well.”
The Senate in November approved a bill to raise the minimum wage from $8 to $11 an hour over three years and to authorize the wage floor to rise in lockstep with inflation.
DeLeo said he plans to ask lawmakers to vote on one piece of legislation that couples the minimum wage and unemployment insurance, but could not say when the bill would come up for a vote. He said he thinks it is important to address the issues simultaneously.
Co-chaired by minimum wage hike supporters Rep. Thomas Conroy (D-Wayland) and Sen. Dan Wolf (D-Harwich), the Labor and Workforce Development Committee is considering the issues. DeLeo said he has asked the chairmen to run some numbers “to see how things would actually work out over the long run with various changes.” He expects the chairmen to report back to him within two to three weeks.
A Democrat from Winthrop, DeLeo said he understands the plight of people trying to make a living on the current minimum wage, but fears job creation will be stifled without reforms to unemployment insurance.
The Legislature has intervened to block increases to unemployment insurance rates for the past several years, hoping to stimulate job growth. The state’s jobless rate recently rose higher than the national unemployment rate.
Business groups have pleaded with lawmakers to make systemic changes.
Unemployment insurance rates in Massachusetts are among the highest in the nation, according to the Associated Industries of Massachusetts, which estimates UI rates will rise 33 percent without legislative intervention.
AIM is pursuing changes to bring the state into line with unemployment insurance practices in the majority of other states. The employer group wants to limit the duration of benefits to 26 weeks, increase work and wage requirements for benefit eligibility, and update rate tables to create equity in employer payments, according to AIM.
In a Nov. 25 memo to lawmakers, Mass. High Tech Council President Chris Anderson said UI system reforms could address the perception among its members that is “less competitive” on cost issues than other states. The council found 67 percent of tech community survey respondents supported an increase in the minimum wage up to $10 an hour if UI system reforms were included as an “inseparable component” of the minimum wage proposal.
Legislative leaders have recently said there is some appetite to freeze unemployment insurance premiums again to prevent a rate increase, and possibly reduce premiums for businesses. In past years, the Democrat-controlled Legislature has rejected proposals to reduce benefits and bring them closer to standards in other states.
“I too am concerned about some of the disparities we’re seeing in income. But on the other hand, we have been talking about UI reform, you know, for some time now,” DeLeo said.
On Monday, Martha Coakley, the state attorney general and Democratic candidate for governor, urged lawmakers to raise the minimum wage without tying it to unemployment insurance. She asked Democrats in the Legislature to pass a minimum wage hike now and “not hold it up by tying it to other proposals.”
Coakley said raising the minimum wage would help families and the overall economy, citing a report by the Massachusetts Budget and Policy Center that $1.5 billion in new wages generated by a $3 increase in the minimum wage would be spent in the local economy.
Democrat Steve Grossman, the state treasurer who is also running for governor, has said he will not support any minimum wage increase bill that cuts unemployment benefits.
After the Senate approved its wage floor bill, Senate President Therese Murray (D-Plymouth) said she planned to bring an unemployment insurance system bill to the floor in January. No bill has surfaced to date in the Senate.
DeLeo said he is concerned that businesses, particularly smaller operations, will not be able to afford paying a higher wage without seeing some relief on what they pay in unemployment insurance rates.
“So that’s why I think they’re so important to keep interconnected because the most important thing that we can do, as I just stated that, is the creation of jobs,” DeLeo said. “That’s why I think it is so important to work with not only the poorest, the most vulnerable citizens we have. On the other hand I think it is important to work with the business community to make sure we send a message that Massachusetts is good place to be, it’s a good place to do business, and we as a Legislature realize that.”
Activists pressing forward a November ballot proposal to raise the minimum wage to $10.50 per hour are lobbying lawmakers against reducing benefits for the unemployed.
“We urge you to oppose any legislation that cuts unemployment insurance benefits or eligibility even if it includes other positive parts like raising the minimum wage,” wrote Raise Up Massachusetts leaders Lew Finfer and Deb Fastino in a Dec. 19 letter to lawmakers.
While employers are trying to ease the pinch of UI system costs, Raise Up Massachusetts says low-wage workers are feeling their own constraints.
“The minimum wage in Massachusetts has been stuck at $8 an hour since 2008, yet costs keep rising – and workers are long overdue for a raise,” the group said on its website in making the case for a wage hike. “Workers can’t afford the basic necessities, and it’s an everyday struggle to put food on the table and keep a roof over their heads.”