GloucesterTimes.com, Gloucester, MA

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July 26, 2013

Study: Forced wage hike would KO jobs

BOSTON — While advocates for a minimum wage increase are poised to push for a 2014 ballot question in 2014 to raise the minimum wage to $11 an hour, the National Federation of Independent Business has released a study predicting that such a wage hike, by 2015 and tied to inflation, could cost the state up to 63,000 jobs over the next 10 years and reduce economic output by $45 billion.

The report, prepared by the NFIB Research Foundation in Washington, suggested that the annual labor cost per employee for small business owners could grow $4,000 to $6,000 per employee, depending on whether the wage is indexed to inflation and at what rate it grows.

“This proposal would hit the economy like a wrecking ball and we think it’s important for lawmakers to understand the potential consequences before they adopt it,” said NFIB State Director Bill Vernon. “The bottom line is that Massachusetts will have tens of thousands fewer jobs, which means fewer opportunities for workers on the lowest rungs of the ladder.”

The report modeled a bill filed by Rep. Antonio Cabral that would increase the minimum wage in Massachusetts from $8 to $11 in two steps by 2015. Sen. Marc Pacheco has filed similar legislation to raise the wage rate to $11 over three years.

“It’s just not anywhere close to being accurate. It’s what they’ve said in the past and it has never come to fruition,” Pacheco said, responding to the report. “The same groups opposed to the minimum wage were also in opposition to passing health care reform in Massachusetts. They were also for the most part in opposition to passing new sets of energy legislation. States that we compete against did not do what we did, and we’ve created more jobs than they have.”

Pacheco would like to see his bill pass the Legislature this session, but if not, he said he would be “all for” putting a question to raise the wage rate on the ballot in 2014. “I think the citizens of Massachusetts are far and away ahead of the political leaders, in this case,” Pacheco said.

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