Writer: Ryan Gandolfo
2 min read January 2023 — Massachusetts workers welcomed a state minimum wage increase to $15 on Jan. 1, 2023 — part of a five-year plan of annual wage increases passed in 2018 — but the completed compensation hike comes amid higher costs in housing.
Last Friday, Attorney General and incoming Gov. Maura Healey issued a notice reminding employers to abide by the changes in minimum wage across the state. “Through enforcement actions, education, outreach and collaboration with our community partners and government agencies, our Fair Labor Division works hard to ensure workers and employers are aware of their rights and obligations under the law,” said Healey in a press release.
According to NBC Boston, the increase in wages is estimated to impact 25% of the state’s workforce, including tipped workers, who get a pay bump to $6.75 per hour in 2023 and are locked in at a $15 hourly rate if additional tips don’t reach the minimum wage threshold.
U.S. Department of Labor data shows the state minimum wage has nearly doubled since 2008, rising $1 nearly every year from 2015 till now. It also stands as the second-highest minimum wage, only trailing Washington, D.C.
However, the new minimum wage is nearly three times less than the living wage of an adult with one child ($44.23), according to a living wage calculation for Massachusetts by MIT. A living wage is defined as “the hourly rate that an individual in a household must earn to support his or herself and their family” under assumption that the sole provider is working full time (2,080 hours per year).
Housing, which accounts for a significant portion of income, has contributed to the need for increased wages. The 2022 Greater Boston Housing Report Card, recently released by The Boston Foundation, indicated the region would receive a “failing grade” for metrics like housing accessibility, equity and availability.
Data from the report highlighted the gap in vacancy rates between a healthy housing market and the Greater Boston area, noting about 6% of apartments are typically for rent in a steady market while that same figure sits around 4% for Boston and the outlying areas.
“For the upcoming year, one of our priorities is focusing on housing attainability. The availability and cost of housing is an issue of economic competitiveness here, especially when considering companies’ abilities to grow and relocate here and attract the workforce they need,” Catherine Rollins, director of Boston/New England at the Urban Land Institute (ULI) told Invest:. “We have a broad initiative to move the needle forward on this issue in the public policy realm, using our member network and outside stakeholders.”
One solution that could house more workers in lower income brackets is building vertically. “I’d suggest more height and density on the housing side. It’ll be great to return to the old-fashioned retail on the first floor and people above. There are several projects in Boston but if you talk to some city councils off-record, they’ll tell you they have enough in their districts. Housing has to be an original solution. You can’t look to one place to carry the burden because land values in Boston are expensive compared to surrounding communities. If you’re looking at land, construction and labor, rent costs would be higher unless you get a government subsidy,” Greater Boston Real Estate Board President and CEO Greg Vasil told Invest:.
For more information, please visit:
