Thank you for the opportunity to testify today. My name is Yannet Lathrop, and I am a researcher and policy analyst at the National Employment Law Project (NELP). NELP is a non-profit, non-partisan research and advocacy organization specializing in employment policy. We are based in New York with offices across the country, and we partner with federal, state, and local lawmakers on a wide range of workforce issues. Across the country, our staff are recognized as policy experts in subject areas such as unemployment insurance, wage and hour enforcement, and—as is relevant for today’s hearing—the minimum wage. We have worked with dozens of city councils, state legislatures and the U.S. Congress on measures to boost pay for low-wage workers. We track both, the economic experience of state and local jurisdictions that have increased their wage floor, and the academic research on the minimum wage. As a result, we have developed a strong expertise on the analysis of minimum wage policy.
NELP testifies today in support of S.1004 and H.2365, which would raise Massachusetts’ minimum wage to $15 by 2021, gradually eliminate the subminimum wage for tipped workers, and index both to inflation so that the value of the minimum wage does not diminish over time. This policy will help workers in Massachusetts—which has some of the highest costs of living in the country—meet their basic needs; and would ensure that tipped workers are entitled to the same One Fair Wage as the rest of the labor force. Eliminating the unjust subminimum tipped wage is, in fact, a crucial part of any minimum wage increase that seeks to make a significant difference for low-wage workers. The complex subminimum wage system for tipped workers is difficult to enforce and can result in widespread noncompliance. Workers who are forced to rely mainly on tips as income—rather than on a stable base cash wage paid directly by their employer—face wide fluctuations in paychecks as tips vary from season to season, shift to shift, and customer to customer. As a result, these workers have higher rates of poverty than the rest of the labor force.
NELP also testifies against H.1021, which would discriminate against workers under 18 years of age, by allowing their employers to pay 20 percent less than the regular minimum wage. “Youth wage” policies hurt young and adult workers alike, with particularly harmful consequences for young workers from low-income households—whose earnings are indispensable to their families’ budgets—and college students who often depend on their earnings to finance their education. NELP urges the legislature to reject H.1021 as well as any other proposal than would exempt or adopt a lower minimum wage for young workers of any age.
If Massachusetts approves a $15 minimum wage, the state would join a growing number of jurisdictions across the country that have enacted or are pushing for similar policies. Two of the nation’s biggest states—New York and California—with strong economies similar to Massachusetts, approved statewide $15 minimum wage policies last year, while Oregon adopted a slightly lower wage floor of $14.75 for most of the state. A growing number of other states—including New Jersey, Vermont, Connecticut, Rhode Island, Maryland and Hawaii—are currently or will soon be considering similar $15 minimum wage legislation. In addition, nearly two-dozen cities and counties from Washington, D.C. to Minneapolis to Flagstaff, Arizona have approved $15 minimum wage legislation of their own, and other local campaigns are underway.
The most rigorous modern research on the impact of higher minimum wages—including robust increases to $13 or more—shows that these polices boost worker earnings with little to no adverse impact on employment (including teen employment). The benefits for low-wage workers and their families have been significant, raising pay in the face of broader economic trends that have led to stagnant and falling wages across the bottom of our economy, reducing economic hardship, lifting workers out of poverty, and improving other life outcomes. The increased consumer spending triggered by higher wages can have the effect of boosting demand for goods and services and keeping money circulating in the economy, creating a virtuous cycle that benefits workers, businesses and the economy.
In the testimony that follows, I will summarize the evidence on these and other key points.