The Massachusetts economy is one of the strongest in the country, but income inequality in our state is consistently ranked among the worst. This imbalance is more than a mild embarrassment; it’s steadily wearing down our ability to fashion a balanced state budget that makes necessary investments in our communities. We must do more to reduce our state’s inequality and create an economy that invests in families, gives everyone the opportunity to succeed, and creates broadly shared prosperity.
We’ve done it before. During the decades following World War II, wages grew along with productivity, and people of all income levels benefited from economic growth. Since the 1970s, productivity and economic growth have continued, but those with the highest incomes are the only ones benefiting. From 1979 through 2011, incomes of the top 1 percent in Massachusetts grew 10 times faster each year than incomes of families in the bottom 90 percent, which barely increased at all.
This lack of wage growth for so many people results in lower overall tax revenues for the state, according to Gov. Charlie Baker. While there are certainly several causes for the $400 million budget shortfall now facing the governor and Legislature, one reason is that while wage growth has increasing gone to the wealthy, Massachusetts taxes all income at the same rate.
To address our persistent budget shortfalls and create lasting economic growth that reaches all people, we need a change. Raise Up Massachusetts, a grassroots coalition of community organizations, religious groups, and labor unions, has crafted a comprehensive agenda that will help create a more equitable economy in Massachusetts.
In 2014, our grassroots coalition won passage of legislation giving a raise to 500,000 workers by increasing the state’s minimum wage from $8 to $11 over three years. That same year, we went to the ballot and won the right to earned sick time for every worker in the state, with a nineteen point margin of victory. While some will falsely claim that these policies hurt our economy, Massachusetts experienced 8.4 percent growth in the earnings of low-wage workers between 2014 and 2016, and it didn’t come at the expense of economic progress. Our state’s economy is booming, unemployment is down, and business confidence hit a 13-year high in January.
But with our state’s high cost of living, we need to keep raising wages so that all working people are able to meet their basic needs. Our minimum wage legislation would boost the state’s minimum wage by a dollar each year over four years until it is $15 an hour in 2021. This simple step will put much-needed wages in the hands of just over a million of our state’s workers. That’s a third of the state’s workforce. Giving them a raise means they will have more money to spend at small businesses in their neighborhoods, helping those businesses thrive, creating more jobs, and growing our economy from the bottom up, not the top down.
If we are serious about providing opportunity for all, we also need to ensure that no one has to choose between the job they need and caring for the family they love in a time of crisis. Our paid family and medical leave legislation would provide job-protected paid leave to recover from a serious illness or injury, to care for a seriously ill or injured family member, or to care for a new child. Employees taking paid leave would receive partial wage replacement benefits from a state insurance trust fund, so that no person, or their employer, has to bear the burden of an illness, injury, or the birth of a child alone.
Finally, for Massachusetts to stay competitive, we must invest in quality public schools, affordable higher education, and a reliable transportation system so that our economy works for everyone. Our Fair Share Amendment would amend the Massachusetts Constitution by creating an additional tax of 4 percentage points on annual income above $1 million, and dedicates the funds raised by this tax to transportation and public education, to make investments that strengthen our economy for future generations.
With this agenda, we can create a Massachusetts economy that works — for all of us.
By Deb Fastino, Lew Finfer and Harris Gruman