AMHERST — As 2019 draws to a close, 420,600 low-wage workers in the state are expected to see a pay raise when the Massachusetts minimum wage increases by 75 cents on Jan. 1.
The upcoming minimum wage increase from $12 to $12.75 per hour is mandated by the “Grand Bargain” state legislation signed by Gov. Charlie Baker in June 2018. Under this law, the state minimum wage will rise each year until it reaches $15 per hour in 2023. In 2020 alone, this change will result in an overall $410 million wage increase, according to the Massachusetts Budget and Policy Center.
Nick Seamon, owner of The Black Sheep cafe in Amherst, told the Gazette on Thursday that he is in favor of a $15 minimum wage, though he added that customers should expect to see the change reflected in the cafe’s pricing.
“The ultimate impact is that prices are going to come up,” Seamon said. “At a business like mine, or anyone else’s, the more I pay in the payroll, the more we have to charge for what we do, but that’s life.”
Advocates of a $15 per hour minimum wage say that all employees are entitled to a living wage, which is not supported by current regulations. But opponents say that increasing the minimum wage will place a strain on small businesses and retail overall and project that the raises will lead to businesses shuttering, raising their prices or cutting jobs to make up for the pay difference.
On a national scale, the nonpartisan Congressional Budget Office found that increasing the federal minimum wage from $7.25 to $15 per hour would result in pay raises for 17 million workers making less than $15 per hour and 10 million workers earning slightly above this rate. But another 1.3 million workers could lose their jobs, according to the analysis.
Cashiers start at the current Massachusetts minimum wage of $12 at The Black Sheep, Seamon said, though most positions, including bakers, begin at higher pay. But the increasing wages will not only impact the cafe’s lowest-paid employees, he added.
“When the minimum wage goes up, there’s a ripple effect,” Seamon said. “If I have someone who started last year at $12 and now they’re making $12.75, and someone walks through the door as a new hire and is making $12.75, I don’t feel comfortable making someone who’s worked for me for a year stay at that same pay, so it really does have a ripple effect on my whole payroll.
“I have 30 employees here, so, when you do the math, it’s a big effect each year,” he added. “I have to be comfortable with raising our prices. And I’m OK with that — I just hope our customers are.”
Kristepher Severy, manager at Raven Used Books in Northampton, said that he finds the legislation’s pay scale increases “gradual and reasonable.”
“I think it’s going to be good for the economy,” Severy said. “They were right to do it gradually so that businesses can take into account the future … I don’t think it’s going to affect the Raven very much at all, except I think the employees will be happier.”
All employees at Raven are currently paid at least $14, Severy said, adding that the bookstore began to increase its lowest wages above the state minimum wage in anticipation of the upcoming legislative requirements.
Severy said that he has had to increase pricing at Raven, which he attributes to several factors, including minimum wage increases and overall rise in retail value of books. But with a higher minimum wage, Severy believes that people will be able to keep up with higher price tags.
“I’ve always thought that if the minimum wage is higher, then, because people have more money in their pockets, it’s more feasible for them to spend money in their economy, and also to simply afford rent and food,” he said.
Seamon also noted that the wage increases will contribute to a better quality of life for employees, adding that people undervalue the work done by food service employees and farm workers.
“Prices go up at the gas pump, on interest rates, on insurance — you name it,” he said. “Things go up, so why shouldn’t a cup of coffee or a sandwich go up in price? People need to make a living wage — that’s the bottom line.”
Jacquelyn Voghel can be reached at jvoghel@gazettenet.com.