In a previous article, "
Massachusetts Legislature Considers Unemployment Insurance Reform
and Minimum Wage Increase," we outlined the Massachusetts
House and Senate's separate plans to increase the minimum wage
and reform the unemployment insurance system. With the end of the
legislative session in sight, House and Senate leaders have agreed
to a compromise bill that both increases the minimum wage to $11 an
hour and reforms the unemployment insurance system to provide the
system with more stability.
On June 12, 2014, the Senate voted 35-4 in favor of
legislation that raises the minimum wage to $11 an hour by 2017.
The wage will be raised $1 from the current $8 an hour every year,
starting on January 1, 2015 so that the wage will be $9 an hour in
2015, $10 an hour in 2016, and $11 an hour in 2017. Unlike earlier
proposals in the Senate, this bill does not index the minimum wage
to inflation, making a future fight over the wage more likely. The
compromise bill also increases the minimum wage for tipped
employees from $2.63 to $3.75 an hour, which is significantly lower
than in earlier legislative proposals. Additionally, the minimum
wage for agricultural and farming workers was raised from $1.60 to
$8 an hour.
Under the proposed bill, over 575,000 Massachusetts
workers will get a raise. Senator Dan Wolf (D-Harwich) argued that
the bill will act as an economic stimulus that will put an average
of $6,000 in the pockets of minimum wage earners that they will
then put back into the economy.
On June 18, 2014, the House voted 124-24 in favor
of the bill, which will give Massachusetts the highest minimum wage
in the country. The bill was signed by Governor Patrick on June 26,
Democratic legislative leaders correctly hoped that
this bill is enough to stave off a ballot initiative that would
raise the minimum wage to $10.50 an hour indexed to inflation. On
June 23, 2014, Raise-Up Massachusetts, the primary sponsor of the
ballot initiative, said that it is no longer necessary given the
The compromise also reforms unemployment insurance
by adjusting the rates paid by businesses to cover benefit costs
for the jobless, which aims at avoiding steep increases in rates.
There will be lower costs for employers with stable workforces.
In addition to the minimum wage and unemployment
insurance reform, the House passed an economic development package
on Wednesday, June 16. The bill, which passed 125-23, includes $10
million for brownfield redevelopment, $15 million for a middle
skills job training fund, job boosting efforts for Gateway Cities,
and a Big Data Innovation and Workforce Fund, which focuses on
analytics and data-based industries. Notably, the bill omitted
Governor Patrick's proposed reforms of eliminating non-compete
agreements and putting more power over the issuance of liquor
licenses into the hands of municipal governments.
The House also voted 132-13 to create a sales tax
holiday weekend from August 16-17 this year. The Legislature has
enacted this holiday in every year except for 2009. Last year, the
state lost an estimated $24.6 million in revenue because of the
holiday. A voice vote rejected a Republican move to make the
holiday permanent. While the House then rejected a meals tax
holiday, they agreed on a vote of 102-37 to study the issue.
The Senate is expected to release their economic
development bill imminently.
Finally, the Senate passed a $1 billion bond bill
that authorizes financing for an expansion of the Boston Convention
and Exhibit Center, which will double its convention and exhibition
space. The bonds for this bill will be funded from existing tourism
taxes. A provision in the bill allows for the treasurer and
secretary of administration and finance to increase the Boston
hotel room tax to 14 percent, if the funding to pay off the debt
does not come through. The House previously passed a bill to expand
the Convention Center.
According to Senator Brian Joyce (D-Milton), the
predictions of 2,100 new permanent jobs might be overly optimistic.
Senate President Therese Murray said that the expansion will
"allow more events, both national and international to come to
Massachusetts and help to firmly place ourselves in a cutting-edge
world economy" because the state's current convention
centers, facilities, and hotel space pale compared to other
ML Strategies will continue to monitor the final
weeks of the 2013-14 legislative session, which ends on July
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