FREQUENTLY ASKED QUESTIONS
Does raising the minimum wage affect overall employment?
Two recent meta-studies compiling data from over 30 economic studies each since the early 1990s concludes that the minimum wage has little or no discernible effect on the employment prospects of low-wage workers.
Can small businesses afford to raise the minimum wage?
Many small businesses are worried about higher labor costs because the margin of profit in the restaurant and retail industry is very slim. However, as many small businesses have noted, they have to compete with major national chains that keep their prices low through conglomeration and poverty level wages. Making the chain stores pay a living wage - and most can afford it because of record profits - would lighten the burden on local, small businesses.
How would a higher minimum wage affect the economy?
A 2011 study by the Chicago Federal Reserve Bank
finds that minimum wage increases raise incomes and increase consumer spending, especially triggering car purchases. The authors examine 23 years of household spending data and find that for every dollar increase for a minimum wage worker results in $2,800 in new consumer spending by his or her household over the following year.
Wouldn’t raising the minimum wage cause prices to rise?
A 2015 study by the Purdue University found that raising wages to $15 per hour at fast food restaurants could lead to a 4.3% increase in menu prices - only 17 cents more for a Big Mac. However, the head of the department responsible for the study acknowledged they didn’t account for the potential savings from reduced turnover.
Turnover is the rate that employees are replaced by new employees. Training new workers is very expensive, and in the fast food industry the turnover rate is an astonishing 93% per year. Researchers at the University of Massachusetts-Amherst found that a $15 wage would reduce turnover by 29%, which offsets increased labor costs by 20% through retaining talented workers.
1: McClure, Greg. “Study: Raising wages to $15 an hour for limited-service restaurant employees would raise prices 4.3 percent.” Purdue University School of Hospitality and Tourism Management, 27 July 2015.
2: Pollin, Robert and Jeannette Wicks-Lim. “A $15 U.S. Minimum Wage: How the Fast-Food Industry Could Adjust Without Shedding Jobs.” University of Massachusetts-Amherst, Department of Economic and Political Economy Research Institute, January 2015.
Who is making the minimum wage anyway? Teenagers?
It is a common myth that very low-wage workers—workers who would see a raise if the minimum wage were increased—are mostly teenagers. According to a 2013 Massachusetts Budget and Policy Center report, 73% of minimum wage earners in the Commonwealth are 20 years old or older and 53% have at least some college experience. 60% are women. Across the United States, the average age is 35 years old. 88% are not teens, they’re 20 or older. 36% are 40 or older. 56% are women. 28% have children. 55% work full time. On average, they earn half of their family’s total income. 44% have at least some college experience.
How do people live on less than $15 per hour?
About half of people working in fast food, child care and home care receive public assistance via Medicaid, the Earned Income Tax Credit, food stamps or Temporary Aid to Needy Families program. Poverty-level wages paid by businesses, including some of the largest and most profitable companies in the U.S. - like McDonald’s and Wal-Mart - are costing U.S. taxpayers nearly $153 billion each year in public support for working families.
Can your employer fire you for protesting or organizing with a labor union?
The National Labor Relations Act of 1935 protects all employees in America (excluding agricultural and domestic labor, government employees and independent contractors) from being fired, demoted or penalized in any way for engaging in any form of “concerted activity for the purpose of collective bargaining or other mutual aid or protection.” This includes forming, joining or assisting labor organizations as well as protesting, picketing and striking.
What is the current minimum wage? Didn’t Massachusetts just raise it?
In 2014 the Massachusetts legislature voted to raise the minimum wage to $9 per hour in 2015, $10 in 2016, and $11 in 2016. A person making $11 per hour working full-time earns $22,000 a year before taxes. The typical required annual income after taxes for 1 adult in Boston is $28,644 and $57,967 for 1 adult and 1 child.
What is the history of the minimum wage?
The federal minimum wage was first enacted as part of the “New Deal” in 1938 at the height of the Great Depression. Its twin goals were maintaining a wage floor to keep workers out of poverty and stimulating the consumer spending necessary for economic recovery. President Franklin Roosevelt called for its enactment as “an essential part of economic recovery,” explaining that by increasing the purchasing power of those workers “who have the least of it today, the purchasing power of the Nation as a whole – can be still further increased, (and) other happy results will flow from such an increase.”
The value of the federal minimum wage was the highest in 1968, at $1.60 per hour - $10.85 in real value 2015. Had the minimum wage been raised since 1968 at the same rate as growth in productivity--i.e., the rate at which the average worker can produce income for her employer from each hour of work--it would be nearly $18.50 an hour.
Can the city of Boston raise the minimum wage?
A municipality could move to increase its minimum wage, though it would then have to petition the state and get legislative approval to do so, according to the state’s office of Labor and Workforce Development.