Deal would hike minimum wage to $11 by 2017

BOSTON -- A deal struck by House and Senate negotiators would hike the state's current $8-per-hour minimum wage to $11 per hour by 2017, but would not tie future increases to inflation.

The Senate was expected to vote later Thursday on the compromise hammered out by a six-member conference committee that had been trying to reconcile bills passed separately by the House and Senate.

The agreement calls for raising the minimum hourly wage for the state's lowest paid workers to $9 on Jan. 1, 2015, then to $10 the following year, and finally to $11 on Jan. 1, 2017.

The compromise does not include a Senate proposal that would index subsequent increases to the U.S. Consumers Price Index.

The House version of the bill called for raising the minimum wage to $10.50 over three years, but without indexing it to inflation.

Both the House and Senate had originally sought to make the initial minimum wage increase effective on July 1, but some employers had expressed concern about implementing the change that quickly, so the compromise pushes the effective date back six months to Jan. 1.

"Even though they work hard, some of them working two or three jobs, they are not making it in Massachusetts and hopeful this is going to help them," Senate President Therese Murray said of minimum wage worker prior to Thursday's debate.

Even with the increase to $11, many would still remain below the poverty level, Murray added.

The compromise also adopts the House proposal for raising the current $2.63 per hour minimum wage for tipped workers, such as restaurant servers, to $3.75 per hour over three years. The Senate version would have gone to $5.50 for tipped workers over three years.

Jon Hurst, president of the Retailers Association, warned the minimum wage increase could drive many stores out of business.

"It's really no compromise whatsoever from the perspective of small businesses here in Massachusetts," said Hurst. "It's a 38 percent increase in the minimum wage, far above any other state."

The group Raise Up Massachusetts has been gathering signatures to put a question on the November state ballot that would increase the minimum wage to $10.50 per hour in two years, coupled with automatic adjustments for inflation.

In a statement, the group said Thursday that the compromise was "a positive step," but said it would continue signature collection and wait until the bill was signed into law before deciding whether to withdraw the ballot question.

Murray told reporters she believed the ballot initiative would be dropped if the compromise is approved.

The bill also includes proposals aimed at reining in what business leaders say are the nation's highest unemployment insurance costs.

Unemployment insurance rates would remain frozen for three years under the bill and rating tables would be updated. The changes would not reduce employee benefits.

Associated Press writer Steve LeBlanc contributed to this report.