WGBH Radio; The Callie Crossley Show

I'm Cally Crossley This is the Cali Crossley Show. Today we're talking about the minimum wage and what it would mean for the Bay State if legislators increase it in 1912 Massachusetts became the first state in the union to set a minimum wage to protect women and children. Twenty years later the Great Depression made this a national concern in 1038. President Roosevelt pushed through minimum wage legislation as part of his New Deal reforms. Ever since critics and supporters have been slugging it out over the minimum wage some argue that it's destroying jobs making it too expensive to keep workers. Supporters say a healthy wage is good for productivity and purchasing power. It's a debate that's playing out here as lawmakers aim to increase the minimum wage from eight to 10 dollars an hour. Up next maximizing the minimum wage. A win for workers or a blow to business. First the news. From NPR News in Washington I'm Louise Schiavone. A cease fire has been pending

and international pressure is on. But in Syria there is no sign that a government assault on civilians is abating. NPR's Michele Kelemen tells us that despite the fact that Syria was supposed to begin to pull back from urban areas today U.N. Arab League envoy Kofi Annan says it's too early to give up on the cease fire. After visiting refugees in Turkey Annan told reporters it was heart wrenching to hear the stories of men women and children uprooted from their homes and fired upon as they fled the violence has gone on for too long Annan warns. But he says there is still time to end it. Annan who is the joint envoy for the U.N. and the Arab League says the Syrian military has withdrawn from some areas but is also moving into areas not previously targeted. The Obama administration says it will work with international partners on next steps if Damascus does not keep its commitments to an end. Michele Kelemen NPR News Washington.

President Obama mixes official and campaign business today on a trip to Florida. He'll do some fund raising in Palm Beach Gardens and Hollywood Florida. And as Shannon Novak reports from Miami the president will also offer a defense of higher taxes for millionaires. The President's Day begins with a 10 to $15000 a plate lunch at the home of a former Pratt and Whitney executive. A less pricey hotel event and a 10 to $50000 a plate dinner at a private home. This afternoon the president is scheduled to speak with staff and students at Florida Atlantic University. The expected topic is the Buffett Rule named for the wealthy Warren Buffett who believes his tax rate should be higher than his secretaries. The president's aim is to tax those with an annual income above one million dollars a rate of at least 30 percent. The Senate is scheduled to vote on the legislation April 16th. For NPR News I'm Shannon Novak in Miami. With Miami's Cuban-American community up in arms the manager of the Miami

Marlins baseball team is apologizing for his words of praise for Fidel Castro. The Marlins are suspending without pay for five games. He says he's deeply embarrassed to the people outside lives. Look at me and I'm very very very sorry about that. The problem about a lot was happening and. I will do everything to make him better. Everything in my power to make him better. The Marlins are playing in a brand new stadium in Miami's Little Havana neighborhood. Small business owners are gloomy about the economy. This according to a survey by the National Federation of Independent Business on Wall Street the Dow is continuing its downward trend down 175 at twelve thousand seven fifty three. This is NPR. Good afternoon from the WGBH radio newsroom in Boston I'm Christina Quinn with some of the local stories we're following. A new government report finds that the six New England states have some of the lowest

teen birth rates in the nation. Nearly every state in the nation saw a decline in teen births from 2007 to 2010 the lowest 2000 rate was 2010 rate was New Hampshire Massachusetts Maine Connecticut Vermont and Rhode Island are also in the bottom seven along with New Jersey Rhode Island the highest of the New England states had twenty two point three births per 1000 teenage girls. The Boston Public School department has been paying more than they need to for books according to an investigation by the state inspector general's office. The Boston Globe obtained a letter written to Superintendent Carroll Johnson by Inspector General Gregory Sullivan stating that the school department not only overspend on book purchases but also on shipping and handling according to an investigation which examined a sample of purchases between April 1st and September 30th 2011. Sullivan said in the letter that he believes the Boston Public Schools could possibly save hundreds of thousands of dollars each year through more effective procurement practices. Rhode Island lawmakers are examining legislation that would lower the state's cigarette tax by a dollar to encourage smokers to spend their money locally instead

of buying tobacco out of state. Representative Robert Willett Robert Phillips rather of one socket is the bill sponsor the Democrat says lower taxes would prevent smokers from buying cigarettes in Massachusetts or Connecticut where tobacco taxes are lower. The state's cigarette tax is now $3 46 cents per pack. The weather forecast for the rest of the afternoon sunny then becoming partly sunny later on with a slight chance of showers highs in the lower 60s mostly cloudy tonight lows in the lower 40s. Wednesday mostly cloudy with a chance of showers in the afternoon highs will be in the mid 50s right now it's 61 degrees in Boston 57 in wester and 61 in Providence. Support for NPR comes from the Pew Charitable Trusts who's home visiting campaign works to advance policies to reduce child abuse and neglect at Pew Trust's dot org. It's one of six in this is WGBH. Good afternoon I'm Kelly Crossley. Today we're talking about the minimum wage and what it would mean for the Bay State if it raises it from eight to $10 an hour. I'm joined by

State Senator Mark but Chico John Hirst president of the retailers of Massachusetts Association and Kevin Lang a professor of economics at Boston University. Thank you all for joining us. Thank you you're here. So Senator I'm going to start with you. You have sponsored this bill. Why. Well show that the average worker out there the minimum wage worker will actually have their purchasing power maintained. When we look at what has happened over the years in terms of the actual value of the wage with the increase in consumer prices obviously they're they're falling behind and there's a growing gap between the minimum wage worker in. The average sane median wage worker in the Commonwealth the gap is growing substantially and it's becoming very difficult for these wage earners to to meet their basic living needs.

One of the stories that you're hearing because typically legislators hear from their constituents and others that bring them to a point of wanting to introduce some legislation to respond to that. Well I have stories all the time and it's not just the minimum wage worker obviously. There is I think a growing gap in income in general. But it is exacerbated when you're someone who's playing by the rules doing everything society Ashu to do get up in the morning go to work. You may be working in that minimum wage job but you you may be working in maybe two or three minimum wage jobs to survive. And I hear the same stories about the price of oil the price of gas the price you know is going up all around them. But yet their minimum wage is staying at the same level. When we've seen a significant increase over the last several years in the wage base of other workers for example the median wage worker.

Which was making both $15 and 99 cents an hour. Back in 1979 is now at nineteen eighty one and all in when we look at the. The 80th percentile worker the higher you know wage earner they were making twenty four eighty five an hour back in 1979 and now they're making $35 and 12 cents you know per hour the statistics are coming from the Massachusetts Budget Policy Institute. They just put on a new report on the minimum wage in in Massachusetts yet if you look at a flash inflation adjusted you know numbers the minimum wage worker back in 1968. It was making over $10 an hour. Ten dollars and fifty two cents I think it was an hour. And today when you look at Felician adjusted numbers in 2012 dollars they're slightly above $6 an hour in real purchasing power. So it's actually lower

than it was so we're heading in opposite directions here. And the only reason why the minimum wage has kept pace at all is because the legislature from time to time Massachusetts legislature says legislatures come from time to time to adjust the minimum wage. We're we're no longer near the top in the United States. There are some that would say with the passage of this law will be number one but we won't be number one for long because other states have a CPI adjusted formula and that's why the AMA is happy right there actually according to the same report that you referred to that in the the mass Budget and Policy Center right now the message is in the middle for minimum wage the federal minimum wage which by the way other states can override is at currently at seven dollars and 25 cents. So just so people understand we're coming from now. John Hirst you're hearing from a different group of folk different stories representing the Massachusetts Retailers Association

and they're a bit concerned about raising the minimum wage. Why. Well you know the bottom line Cali is that we represent small businesses and they're struggling they're struggling because their business is down. You know small businesses what they and their employees are looking for today are jobs. You know what we need to be doing is looking really closely what is are the what are the hold backs for them to hire more people. You know what we're still you know a good hundred thousand jobs lower than what we were you know back a decade ago we we need to do something to really lower the cost of business here in the Commonwealth. You know we already are the sixth highest minimum wage in the country. You know we have all sorts of other states in our in our region Rhode Island New York New Hampshire all lower than US a minimum wages you know where the only state in the entire country that has mandated health insurance. You know both for the small business and their employees there was a an article today in the in

the in the Herald about by the Brookings Institute which is a left left wing wing organization that. That said that our Massachusetts law has cost a lot of noise about $6000 and wages. Since when and in a place that you know I have no problem with with a law that requires you to buy health insurance you to provide health insurance but I do have a problem with you know if it has no controls that allows big health care to raise their prices on patrol. OK I don't want to go down that path we could go. But let me let me swing back to what we need and wait I want to make sure that you're clear about what the impact would be on your belt. Well it would mean less jobs. OK. Because right now you know you only have so much business coming into your into your store into your restaurant and your small business and you know they can today the consumers can go anywhere they can go over the state lines they can go use their smartphones to buy things. You know until we fix some of the high cost of doing business here in Massachusetts and things that are preventing us from hiring more people we can't be looking at more cost on our small

businesses which will therefore cut more jobs particularly for teenagers we have really what is an unprecedented really since the Great Depression level of unemployment for teenagers. And this would most directly hit the teenagers here in Massachusetts. OK. So Kevin lying in doing research for this piece so I find. Good scholarship on both sides so you know we've got a couple of economists written a book called myth and measurement which say minimum wage laws benefit low wage workers and I got a couple of other good scholars who say it cost jobs just as John Hirst has said where are we. If you look broadly how will this increase from 8 to $10 an hour in Massachusetts impact us. Well I think there is truth in both of the stories that you've heard. There has been throughout the United States not just in Massachusetts a big increase in wage inequality starting sometime in the 70s it mostly affected the

bottom part of the wage distribution through some time in the 1980s. Now we're seeing a very big growth in wage inequality at the top which I think is less relevant for the minimum wage. And the evidence certainly does suggest that part of that growth in wage inequality has been the fall in the real value of the minimum wage. On the other hand I think the consensus among labor economists is that increasing the minimum wage does have some adverse effect on employment. Not a large one. It's a small effect. I think that some of the studies you refer to the measurement book they've been challenged by others and I think our consensus is yes there's probably a loss of jobs it's not very large. So what you're looking at here is the tradeoff between some reduction in jobs in an area usually jobs that turn over fairly quickly so we're not talking about a pool of workers being unemployed for a long time but

getting higher wages reducing the wage inequality. And then the question is What's the relation between the reduction in wage inequality and income inequality. The minimum wage is not highly targeted towards low income families. It's somewhat targeted at the workers who work at the minimum wage tend to be in somewhat lower income families but a lot of them are students. And so in net we get we do get a reduction in income inequality when to raise the minimum wage we get a little bit of an increase in a little bit of a decrease in employment. It's a tradeoff where you place the value. So if I understand everything that you've said it could be both and it is it's a tradeoff It depends on how much you. Value the increase in earnings for those people who have the jobs against the small reduction in

employment and also there's an effect on who gets the jobs. So you have to weigh all those things together. All right well we are going to explore all of that as we continue this conversation. Loss of jobs as John Hirst has indicated or helping people keep up. The bigger question what I want to explore really is if there is more money to the low wage worker does it return to the overall economy in terms of getting people to buy more stuff and you know that's what we keep hearing is that was that's what keeps our economy strong so we'll talk about that we're talking about the minimum wage and how it affects the Baystate if it gets a boost from $8 an hour to 10. Join the conversation at 8 7 7 3 0 1 8 9 7 8 7 7 3 0 1 89 70. If you earn a minimum wage how would this increase change your quality of life. Business owners how would this increase affect your business. Would it change how you hire people and who you hire. 8 7 7 3 0 1 8 9 17 8 7

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WGBH dot org slash learning tours. Great question has a great question and that's a great question. It's a great question. Rick great question and feel hear unexpected questions and unexpected answers this afternoon at 2:00 here on eighty nine point seven. Welcome back to the Calla Crossley Show. If you're just joining us we're talking about the minimum wage and what it would mean for the Bay State if it raises it from eight to $10 an hour. I'm joined by state senator Marco Chico. John Hirst president of the retailer's of Massachusetts Association. And Kevin Lang a professor of economics at Boston University. You can join the conversation at 8 7 7 3 0 1 8 9 seventy 8 7 7 3 0 1 89 70. If you're working a job that pays minimum wage let us know how this increase would help you. Business owners how would this affect you if this increases put in place 8 7 7 3 0

1 8 9 seventy 8 7 7 3 0 1 89 70. And you can write to our Facebook page or send me a tweet at Kelly Crossley. So I got a couple questions for each of you something that I've read John Hirst that business owners have put forth as another reason to think about a loss of jobs is that if there are fewer jobs out there because they have to though the amount is raise and they feel they can hire fewer people. They will go for quote the most qualified people or overqualified so that what we think of as the as the minimum wage worker who is one who is poor and low skilled would not be getting the jobs per se. Well that's absolutely right. I think before we jump into doing this and let me just say I wouldn't necessarily be opposed to a minimum wage increase at the federal level. You know where I believe you know you know this this type of discussion really should be should be had because we're such a competitive region. You know put our small businesses in our region out of out of

sync with with the over the border and today with with the smartphone and the ability to buy services and goods over the Internet so easily you know we've got until we can find a way to have those at the other end of the smartphone be hit by the same state mandates as those that are employing people here. You know we have to be very very careful about new mandates put on by our state. But yeah you know I really am concerned primarily about the teenagers. You know I have three sons that just now are in their 20s and they were fortunate to get jobs but they have a lot of friends and you know we are at a all time record high of teenage unemployment. And why is that we need to have a real discussion of that. You know for them to be able to afford to go to be you and and be able to graduate without six figures of you know student loan debt for them to be able to get important job training you know real skills your first job for them to frankly be off the streets and stay out of trouble. You know this is this is a

societal problem that we've got to deal with you know some states have looked at minimum wages and looked at teen wages and we're just giving them you know a 50 cent per hour less you know pay. You know we've got a pretty soon I'm sure we're going to hear from the governor or the mayor we hear every time this year about the importance of hiring teens for the summer. You know it's teens in those with low skills that certainly get hurt by this because you know there's a lot of competition for these jobs and employers with a tight budget is going to hire someone that is the most productive to add to the bottom line. And Kevin Lang what those Person B college grads and retirees more than the teens is that John Hirst is concerned about well actually it's if anything it's the opposite it depends a little bit on the industry that we're talking about. But in fast food food services more generally. We actually see that when the minimum wage goes up there's a shift towards employing teenagers they seem to be the employees of choice in that industry and so if anything the problem is that the

low skilled adults lose some of those jobs again these effects are not large in the retail trade. Again the choice seems to be a little bit different. There we seem to see some substitution towards adult women away from the teenagers in that case. Overall there's very little evidence of an adverse effect on teenagers and in fact just wanted say the few cases where we've experienced experiments in with lower wages for teens. Most employers have simply chose not to use them. OK Mark but Sankoh but Chico Senator Marco Chico I just want to give you a chance to answer something that a lot of people ask why now. I mean you know. This economy is no on a on it's tenuous level at best. You know it's recovering but it's not as strong as it might be. And so some question why now it's increased.

Well if you look at our economy in most of the new numbers that are coming out that you know we are we are we are stabilizing things are moving forward although not as rapidly as we would all love them to be. But during this tough economic period and even before that the real value of the wage base for the minimum wage has dropped twenty four percent. So people have lost 24 percent of their purchasing power. And it's not the top wage base or the even the medium wage base that has lost that purchasing power as the minimum wage base that has lost the purchasing power so why now is because these people are hurting. OK. In if we don't adjust it. And by the way you know the majority of folks that are against raising the minimum wage. I have never come forward with a time when they've been for increasing the minimum wage.

So at any point it's going to be income so every time no matter when we try to adjust the minimum wage. I have never had a coalition in the business really come forward and say yes we are for having the minimum wage increase as a matter of fact his OP proposal and this is how it should be done. Absolutely not we always talk about you know the taxes of Job Job losses. But actually when you look in particular Massachusetts not the national study if you look at our actual experience as to what is happen you know quite frankly I just haven't seen it. OK I haven't seen in my district. You know we haven't seen huge job losses at all they may have been some you know job losses in some areas but they are not substantial at all. Let me have dollars any or do you have it right there let me get some callers in here. Maggie from Boston you're on the Cali Crossley Show a 9.7 WGBH Go ahead please. I hear you fine. I'm well I want to know. And I think in resources I mean most people that we hire are actually living

at home with their parents. They're getting ready for or they're really looking for a job to get job experience you know be making you know how over $10 an hour and most of the old timers that we have that really make it clear there are we making over $10 an hour anyway but I don't really see that where he can you know putting an extra burden on the company to you know make them raise their minimum wage. So you're opposed to the raise from 8 to $10. Yes I am. OK. Yeah let me add to that Kelly. You know a grocery store is a great example because you know a grocery store looking to hire maybe a 14 year old stock person you know right now you've got to pay them right out of the suit $8 an hour. You have to also be open on Sundays you know stunt Sundays is the biggest sales per hour day of you know of the whole entire week for the retail community on Sundays we are one of only two states which require time and happy in a retail setting. So that 14 year old earning eight dollars on six days a week has to be paid right now $12 an hour on

Sunday. You know it's that's that's a vestige of the blue laws dating back to the nine hundred eighty in order to get stores open in the first in the first place that was back when the minimum wage was three dollars and five cents. OK. You're agreeing with the caller. Absolutely and we need to put some common sense in this discussion before we jump to a big increase and look at the impact maybe adjust some of these iniquitous laws so that's what I guess John Hirst who is head of the Massachusetts retailer says Association senator but as your caller mentioned that she said you know most almost everyone that this particular store I guess. Employees making over $10 an hour. So there's the irony in being opposed to someone who is now making $8 an hour which in effect as the same preacher same power going back all the way back to 68 $6 an 84 cents an hour. That's what I was saying is you are you caught up you know it's wrong OK in most of most of these companies are paying way more than the minimum wage.

Let me take another caller I Kevin let me get you in on the other side of the caller. Jeff from Weymouth Go ahead please you're on the Calla Crossley Show eighty nine point seven. Great show I wanted to support that. But Chico and then I had a question for the professor Professor. Common sense not being necessarily common facts. It just seemed to me that increasing the minimum wage is basically going to increase the population and cause substance level. Those who are supporting a household so they can do more discretionary spending be calles such as clothing. And as far as teenagers unfortunately it seems to be a well known fact they do not have a great saving weight. Great so it seems that all this money probably increased the wages would be to a high percentage transferable back into parts of general economy so I see the long winded question. Well that's exactly the question that I wanted to put into the professor So thank you very much Jeff and that is the question if you raise the minimum wage. Do people with this

$2 which may not seem like a lot to other people then use that increased wage to buy more goods and services. Agree that that is a great question and let me circle back to it from from the from the previous question. The caller's right. Approximately half of the people in Massachusetts who would be affected by an increase in the minimum wage are teenagers or very young adults. Approximately half of them are in school most of them part of Syria Muslim full time. Close to half of them live at home. That all makes it sound as if that's not terribly important but you have to remember that many of the teenagers are working are working because they are in fact supporting family helping to support their family or saving for further education. It's not highly targeted so the teenagers who are working are only somewhat from somewhat lower income

families than the teenagers who are not working. But it is somewhat helpful in terms of improving the the income distribution. And that's in terms of what the caller was asking about really is is the main question in terms of whether there will be a macro economic impact when we transfer income from higher income people to lower income people. We do see consumption go up. If this were really a very large transfer from high income to low income I would think this effect would be important. But as I've said Well it is somewhat targeted to lower income families. It's not highly targeted to low income families and I would not therefore expect the effect to be very large. You're listening to a 9.7 WGBH an on line at WGBH dot org. I'm Kalee Crossley this hour we're talking about the minimum wage and what it would mean for the Bay State if it raises it from eight to $10 an hour. I'm joined by state senator Marco Chico. John Hirst president of the retailer's of Massachusetts Association.

And Kevin Lang you just heard him speaking a professor of economics at Boston University. You can join the conversation at 8 7 7 3 0 1 8 9 7 8 8 7 7 3 0 1 89 70 and you can write to our Facebook page or send us a tweet at Kalee Crosley. Now the question of teenagers is one I have to say I had not really focused on I you know in my mind it's an older worker who is unskilled who is looking for more wages. But this conversation that's that's an incorrect image a profile. Well I don't necessarily agree I mean I'm not saying that I don't agree with what the professor is saying I'm saying that I think that at the crux of this issue for me it's about fairness. It's about economic justice. What difference does it make what the ages of a many medium age meet medium wage or those that are in the 80 percent or the minimum wage.

If there's a job that's available and somebody is doing that job are we now going to start to put age standards on what the wages that we're going to pay somebody to do that job. I think not. I think that might be a little discriminatory if there is if there's a job that's available there's an eight hour job before our job a part time job full time job there's a wage that's posted in people you know apply for that work in they should get paid for their work no matter what their age. A growing number of people that are entering re-entering the workforce are people who are. You know actually the you know there's a baby boomer generation Oh the reason I mean there's a lot of retirees coming back and looking for part time work because of the other issues that are impacting them from an economic perspective. I think this is at the heart of this for me and I think a lot of people that

support adjusting the minimum wage it's about economic fairness. Let's face it we could keep it at the same level we had 900 12 when we first adopted the minimum wage here in Massachusetts and for a lot of people that would be just great. They wouldn't mind that at all because the profit margins would be significantly more the lower the minimum wage. I happen to be. If we want to be fair and we know that adjusted for inflation into 2000 and $12 the 1968 minimum wage would be ten dollars and fifty two cents today. Adjusted for inflation in terms of the purchasing power it's really a purchasing power of a little over $6 an hour. And we're not talking about going straight to $10 an hour. By the way when the when the really all was OK when this bill was filed we're talking about a set of benchmarks that would get us to $10 an hour over a two year period. Oh OK. Obviously the bill has been languishing in the legislature for now going on two years.

So if we had passed it when we first filed it and it came out of committee and we got it adopted then we would be moving our way towards a $10 an hour adjustment in 2013. That's what the bill had required. But that was really over a two year period now we're going from the time we filed it. There's been no adjustment there has been no adjustment at all. We have talked about going up to 9 thereabouts. And then then to 10 it will be raw is over well yeah graduated gradually put in place you know let me take another caller. George from Newton. Go ahead please you're on the callee Crossley Show. Eighty nine point seven WGBH George. Sarah thank you. It would help me to understand this discussion if we put hard numbers to this. For instance of the $2 historically and the

you know the power of differing opinions but historically what what has of the $2 what how much has been real per person price. You know power attributes into the $2 increase versus inflation that creates that is created and the economic system so when you increase wages naturally I would assume you know it's going ripple through the economy. Small businesses raise their prices and especially ones that are hurting or in a few that margin contraction. How how does that affect. That's who dollars. I think that's that's a great question. You know I would I would like to ask any of your listeners to go to if they're new or computer go to Commonwealth magazine just their new edition came out today. If you go to the website and look at a story that came out this morning it's called What's up with the sales tax. It's got a pretty incredible. Decade chart there on what's happening with the sales tax and if you look at the last year the sales tax are the minimum wage went up in Massachusetts at the peak of our economy

2005. We were already dropping below the sales tax collections of the other 44 states and it was a huge drop after 2005 clear until 2009 until which point the legislature raised the sales tax by 25 percent. It took that huge increase in the sales tax to get us back to where we were in sales tax collections in 2001. You know there was a huge drop off. Whether it was the minimum wage increase or it was the mandate health insurance and five years in a row of double digit increases and health insurance premiums or just the competition of being able to go to New Hampshire or to your smartphone for the same goods and services at a much lower price because our local employers have higher cost of employing people here. We have to understand that the consumer has choices today. We're not like government we're not like a yeah versity that you know. You know you're you have entrapped payers taxpayers or tuition payers that you know you know it can fund your operations

and more and higher costs on the employment side. We have consumers that are not entrapped they have options they can go elsewhere and if your prices go up. You're going to you're right you're going to have to either raise prices or lay people off. OK so George that was John Hersey is president the Massachusetts Retailers Association and he's speaking about those numbers in terms of the increased cost because of the sales tax here in Massachusetts for business owners but now I'm going to go to Kevin Lang who is a professor of economics at B to answer your question. So if I understood your question correctly you're really asking is will the $2 get eaten up by inflation caused by the minimum wage increase. There will presumably continue to be inflation for other reasons and if you don't change the minimum wage then over time it will it will again be eaten up. I know that part of the proposal is to once the minimum wage goes to $10 to then index it I believe to the consumer price and

in that sense it would not get eaten up because it would just go up as the consumer price index went up but I think the more important question is will this cause a great deal of inflation. I think the way to think about this is. We're talking about a fairly small fraction of the labor force that's going to be directly impacted by this. It's a little hard to tell exactly what the right number is but a number like 10 percent will probably see an average of a dollar increase. And you know labor is about 70 percent of the cost of doing business. Put all that together. You're not going to get a very large impact but of course you will find some. All right. We're going to go to take a break and be back and continue this conversation as we have lots of callers. We're talking about raising the minimum wage is this good for workers is it bad for small businesses. You can join us at 8 7 7 3 0 1 89 70 8 7 7 3 0 1 89 70. You're listening to WGBH

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Morning Edition by here on WGBH Boston Public Radio and good when you're on a cheap trick. Welcome back to the Calla Crossley Show. If you're just joining us we're talking about how raising the minimum wage would affect the Bay State. Would it help the economy by boosting purchasing power. Would it make things worse by creating fewer jobs. We're at 8 7 7 3 0 1 89 70 8 7 7 3 a one eighty nine seventy. You can write to our Facebook page or send me a tweet at Kelly Crossley. Joining us to talk through these issues are state senator Mark but Chico John Hirst president of the retailers of Massachusetts Association and Kevin Lang a professor of economics at Boston University. Susan from Jamaica Plain Go ahead please you're on the callee Crosley show. Eighty nine point seven WGBH Hi. Thanks for having me on. Just briefly when I was doing your poor thing. But the cost of living having

increased so much I think looting when people pay more. Killing clothing chests of necessities of life you know is really a living wage and point where we don't have that and people get paid more our sales through our purchasing power and they distribute. Let's create a better economy many adults now working in Europe that are teenagers who Stewarts him and teenagers often work and improves the economy of the family. If they don't get it fair and decent wage in the family doesn't thrive and the purchasing power grows down and everything else of course no. So what's your question. I'd like to have them comment on that. OK all right. Novelist issues I want to thank you. Thank you very much. Kevin Lang I'll let you start off. Sure I think this is an important point that that Susan is making which is that of course although we've been talking a lot about teenagers and students

and it is true that about half of minimum wage workers are students and about half are about 22 23 or younger so they're either for young adults or teenagers. There still is the other half of the of the minimum wage workers who are adults and in some cases they are the primary provider in their family and we shouldn't lose sight of that. Clearly to the extent that we can raise the purchasing power of lower income families that helps the economy but I don't think we should focus on the minimum wage as a short term solution to the current economic crisis. The proposal that Senator Persico is putting forward is one that would permanently raise the minimum wage and I think this is the proper discussion is the one that's been taking place here which is really about the long run effects on the income distribution and on employment. All right well let's talk about it because we've been talking about bottom line

numbers kind of thing but there's a social cost to any kind of change. Senator but you go since it's your resolution. You know how would you address people who say well you know there's a social cost to this as well if you're depressing businesses and if they're responding by you know cutting jobs and take their business elsewhere out of state you know it ends up being a bottom line thing but there's there's a larger cost for all of us to pay who live here. Well there's my social. Cost issue here is about you know valuing work. If we want to really value work instead of having a situation happen in our society which has happened where people are trying to get ahead doing the right thing in as a result of that their father a father behind maybe they make other choices which are not great for our society. So I think we have to first of all value work. People

that make the right choices that are going to work eight more hours a day in many of these people that are in the minimum wage you know category were talking about doing that with two three minimum wage jobs I have constituents to call me all the time on. Thats why I think that two dollar question that was made earlier I asked earlier. A great percentage of that $2 will go right back into the economy paying bills that are waiting to be pillaged paid. You know people have to pay for the you know gas prices that everybody else has to pay for going back and forth to work or people that might be working at the gas station pumping gas. You know to the extent we have any of those jobs left in our society at the restaurant at the retail you know place and let's and let's put some of the simple perspective in particular from Massachusetts perspective.

When we look at some of our other competitive states in the nation we look at a Washington Oregon Vermont. If we look at Ohio Florida Arizona want TNA Colorado. All of which have indexed to minimum wage. So these are but let me say that John Hirst has just pointed out that New Hampshire is killing businesses here in Massachusetts because of their ability not to have to deal with this. Well it all depends you can ask the businesses in New Hampshire about the property taxes that they might be paying and they might be talking singing a different story there I mean you know if John was representing the retailers in New Hampshire about something happened with property tax he might be looking for a property tax decrease in there OK in the state in New Hampshire OK when they get 85 percent. Massachusetts license plates up there so you know they're they're OK with that you know when you look at it when you look at women asked who says competitively we're doing very well despite all the things that people complain about. Right. We have six point eight percent unemployment

rate. You know today we are moving forward very competitively. We have close to 98 ninety point ninety nine percent of our people that are insured. We are very economic you know. We are doing very well economically Visa V comparing with the other states that we're competing against Would doing very well. The medium income is growing substantially. God knows the 80 percent tile in particular the very high wage earner the 1 percent is just you know just going right off the Chach the extent that we have rallies around you know Massachusetts and around the country starting to protest the the gap that is taking place in our society. This minimum wage bill tries to speak to fairness that we have a part of our society that is doing the right thing playing by the rules. They only want to be treated the same.

I have a quick question for you then I want to get to John's response. Why should those of us not in the 1 percent but why should people outside of the minimum rate group CARE. I mean I know you've said made your point about you know valuing work but OK it's two bucks and why should we care. I mean you know what it's not I'm not the I'm not the low skill workers so why should why is that something that I should pay attention to this is meaningful for me to pay attention to. Well I think if you if we end up having a society that we don't care about the lowest paid then we end up we end up paying for that in the long run with increased crime statistics increase welfare rolls increase. I mean is a whole range of ways that there's an interconnected it way it's going to get impacted in the long run. OK here's my question to you John Harris. When people listen to you why should they understand you are not you know evil Scrooge saying I don't want anybody to get ahead.

You know I know I you know that there's that there's there are some reasons that you're saying what you well you know are our employees are also our consumers. It's very important the reality is the most important thing that we have to focus on are jobs we're still you know way below more than 100000 jobs below than what we were you know a decade ago. We've got to rebuild that job base. We have record numbers of unemployment record all time record of for teenagers. And the reality is these minimum wage jobs are about teenagers. You know people that are just entering the workforce the first time and their initial payment you know for the first few months that's that's the typical minimum wage earner today. And for them they need a job. They know what they need to be able to save so they can go to be you. They need they the money so you know they can so they can they can start looking at at fording their education and staying off the streets and doing something productive getting some real experience you know they're not getting the experience that you and I did when we were teenagers and I was half empty and you're saying that the business

people represent consumers as well so they're out here in the in the economic marketplace. Well yeah and but they see their consumers with options. You know today you know more and more of our consumers are going to over the state lines are going on the smartphone and if you're right the legislature can find a way to have these costs also go to our competitors at the other end of the smartphone and over the over the state lines. I'd be all for lower you know lower the cost of doing business and you'd be a happier camper. But we're right yeah right. We were the sixth highest minimum wage we have the highest health care costs in the country and the only state that requires health insurance. We just had a fat hundred times I want Kathy from wester to get in the men's conversation. Go ahead Cathy on the Cali Crossley Show. Eighty nine point seven WGBH Hi. My point I think the minimum wage should go up and the reason being that I know someone who's on welfare cannot afford to go to work with the minimum wage what it is because she makes much more money staying on welfare because she gets

food stamps. Housing she gets Mass Health for Her insurance and all these things and I mean there's no incentive and a lot of people I know are even staying on unemployment who are probably like in a minimum maybe making $15 an hour would get laid off and now you know they collecting more than if they go to get a minimum wage job they have to hold onto their unemployment as long as possible. These are things people have to look at. I mean you want to get people in jobs. You have to give them an incentive to go to work. All right I'm going to get our economists to respond to you Kevin Lang.. Well how do you respond. I'm actually very sensitive to the issue of making work pay. And that's really the issue that's being addressed to her right. Part of what potentially makes minimum wage proposal more effective is its interaction with the earned income tax credit so that if in fact the minimum wage

earner is a parent with children and is part of a low income family then this increase in the minimum wage will be supplemented by the Earned Income Tax Credit. So that actually increases the benefit of working he even more. That's less of an issue for the substantial group of minimum wage earners who are not heads of households. And again he said early on it's both and neither very much we're talking about tradeoffs to different types of people who are earning the minimum wage. That seems to be the key question around this table is that there is there is there are trade offs on on everybody side here you know if one size doesn't fit all. Yeah that's me that's the problem with any government mandate. I mean it helps them but it hurts others then. That's why it's better to do. If we're going to look at government mandates you do at the federal level you don't do it sweeping.

You know only one state that that's going to damage some of our own people how would you feel about that if it just if you wait for the Fed to raise it and don't do it in Massachusetts. If we wait wait for the federal government. OK OK. Anyway I go along all the time. OK listen we passed the minimum wage here in Massachusetts in 1912 the first state in the nation to do so so that we look at the federal government. There are only 18 states that have passed a minimum wage. You know that. Beyond beyond the federal minimum wage and I don't want higher end in all of the other states out there. You know not necessarily industrial states. So there are very rural states in our country very different economic situations in terms of their own state. You know you know so it is it is very different what I love to have a federal minimum wage. Absolutely. I love the federal government to do a lot of things that would would start to get as into more

economically just you know country that's what the national elections going to be all about as we move forward but let me read to you this way because this is in your wheel house it seems to me that a large overlay on this is really political to me and has to be just by the nature of making a decision about this. So how do you negotiate all of the concerns around this table that you know would for a lot of people it just comes down to you know politics really well when you look at the history of the minimum wage obviously we haven't been able to get a in my opinion I don't think we've been able to get the indexing done. Because there's a lot of us in the Democratic Party for example that want to be able to go back to a constituency every couple of years when everybody is fighting to you know increase the minimum wage. I think we should fix it once and be the same as Washington state in Florida and some of the states that have indexed it which means that when the cost of living goes up in price that's right then it

goes up so then it goes so then we go up and we go down. That happens as well. Based upon what happens with the CPI the same value you know stays in place. The politics around this in terms of the rhetoric right. You'll have people that say that this is just a teenager issue. You know we went straight from the economy and said yeah we can see it from the economists that's here that you know maybe 50 percent of it but there's 50 percent that it's not so it all depends what side of the argument you want to take in terms of the politics right. All right I've got to let John have a quick response. Trade offs trade. That's what that's what the legislative process is about it. I think going into next year I think there needs to be a real discussion on the minimum wage and tie it in to some of the real employment cost reforms like our outrageous UI system we've all read about some of the abuses the loopholes where people like unemployment insurance thank you we just saw that it was approach this year and save businesses are going to argue now and say I get your point.

I want to see about getting people qualifying that never should have gotten those qualifying games. All right. We made some other adjustments we can fix the UI system to make it mainstream like the other 49 states so it's not abused like it has been. You know do that within the parameters of a discussion on the minimum wage. All right Kevin Lang last seconds. I always tell my students in my poverty and discrimination corps that we can disagree because of values or we can disagree because what we believe the model the world says in this case I think the disagreement is about values. All right. Thank you very much all of you very much I'm I guess we've been talking about what it would mean to increase the minimum wage in Massachusetts I've been speaking with state senator Marco Chico. John Hirst president of the retailer's of Massachusetts Association and Kevin Lang a professor of economics at Boston University. Thank you all. You can keep on top of the Calla Crossley Show WGBH dot org slash Calla Crossley follow us on Twitter or become a fan of the Calla Crossley Show on Facebook today show was engineered by Antonio only art produced by Chelsea Mertz will Rose left and Abbey Ruzicka. This

is the Calla Crossley Show a production of WGBH Boston Public Radio.