Tom Shea says the latest increase in the state's minimum wage, to $14.25 an hour, poses problems for small businesses.
For 30 years, Shea has owned TJ Café & Games, a Milford espresso and dessert shop that also offers in-store gaming amenities and products. He said that small businesses are already caught in a vortex of increasing food costs brought on by the pandemic, and that the 75-cent-per-hour minimum wage increase has further complicated things, noting that small business is “getting slammed in every direction.”
“The theory behind raising the minimum wage is that everybody will have more money to spend, but our cost on a lot of the food products we've added to our cafe has also increased over time,” said Shea. "Plus, when you look at minimum wage reaching $15 an hour next year, you see that the employer is paying an additional 20% roughly for state taxes.
“So, if I'm paying you $15 an hour, you're not costing me $15 an hour, you're gonna cost me more like 18 bucks.”
The new state minimum wage, which took effect Jan. 1, is part of a law passed in 2018, the so-called “grand bargain” aimed at keeping multiple questions off that year’s ballot. The law also implemented a guaranteed paid family and medical leave program, and established a permanent sales tax holiday.
Starting in 2019, when the Massachusetts' minimum wage was $11 per hour, the rate has risen in 75-cent increments each Jan. 1; it concludes next year, when it reaches $15 per hour.
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