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The Beacon Hill Report - December 5, 2013

Author: B. Vernon Date: December 04, 2013

Unemployment Insurance Reform and Minimum Wage Increase

The minimum wage issue has been apparently inextricably connected to the unemployment insurance reform issue. The Speaker of the House has indicated he would like to include UI changes in the legislation to increase the minimum wage.

UI is a big problem for employers in MA. Our UI taxes are some of the highest in the nation. Qualification for UI benefits here is easier than it is in other states and benefits can last longer here. UI reform is on the agenda of every business group.

But I also want to assure NFIB members in Massachusetts that we can add. We are all about the cost of doing business and the cost of creating a job, whether regulatory costs, payroll costs or tax costs. We understand that Massachusetts is a high cost state and a high wage state, but we cannot have laws that are out of the mainstream and put our employers and our workers at a competitive disadvantage.  That is why an excessive increase in the minimum wage (significantly higher than bordering states) and UI reforms that do not significantly reduce costs are unacceptable. Frankly, the UI reforms that I have heard talked about would offset the increased wages of one low wage worker in a small business for less than two months.

There is no silver bullet of policy that will help all small businesses. But legislative horse trading one higher cost for a smaller reduction in another cost only increases costs overall. Higher costs mean fewer jobs. And that has been the job creation pattern in Massachusetts for more than a decade.

 

Child Care Unionization 

Home based child care workers have negotiated a contract with the state to increase their pay by ten per cent over three years. The state also agreed to improve professional development and training.

Last year, the legislature passed a law allowing the unionization of workers at home-based day care centers, including the business owner. The law treats those affected essentially as state workers for the purposes of, so far, limited collective bargaining. NFIB is supporting a legal challenge to a similar Illinois law. The constitutional case is currently before the United States Supreme Court.

The legislature in Massachusetts was and continues to be completely within its rights and obligations to fund increased wages for home-based child care workers and to mandate enhanced professional development and training without union involvement. This is all about new union membership when unions are desperately seeking new members. There is no analysis of workers’ costs attributable to union dues and their impact on the 3.3% average annual wage increases. Taxpayers will pick up the $30 million increase.

Meanwhile the state is considering legislation to unionize workers at institutional day care facilities. Testimony in support of and in opposition to House Bill No. 477 and Senate Bill No. 223 was heard by the Committee on Public Service on November 25. The proposed legislation would allow employees of child care centers where at least ten per cent of the children are subsidized by the state to organize and collectively bargain with the state on wages and conditions of employment. The legislation specifically exempts child care centers run by government agencies and most large non-profit centers.        

 

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