Mass. Minimum Wage Rises To $10 An Hour

The new year brings a lift to Massachusetts' lowest-paid workers, as the state minimum wage and a targeted tax credit have now increased.

As of Jan. 1, the minimum wage is $10 an hour, up from $9 an hour in 2015.

By one estimate, from the liberal-leaning Massachusetts Budget and Policy Center, nearly half a million workers in the state will see "modest increases in their paychecks" because of the newly raised pay floor.

Massachusetts now has the highest state minimum wage in the country, along with California, which also increased to $10 an hour on Jan. 1.

"This increase in the minimum wage provides some additional security for our lowest paid workers, but there is still much more work to be done to fight poverty and advance economic security for Massachusetts families," state Attorney General Maura Healey, a Democrat whose office enforces labor laws, said in an advisory this week about the pay hike.

The wage floor for tipped employees in Massachusetts also rose as of Jan. 1, from $3 an hour to $3.35 an hour.

The raises are the result of a 2014 law, which outlined planned increases in the Massachusetts minimum wage, from $8 an hour to $11 an hour over three years. On Jan. 1, 2017, Massachusetts' pay floor will rise to $11 an hour. That's set to be the highest state minimum wage in the U.S.

The minimum wage isn't the only pocketbook policy changing in 2016.

The state earned income tax credit (EITC), for low-income workers, also rises on Jan. 1, following a budget accord reached by Republican Gov. Charlie Baker and Democratic legislative leaders over the summer.

The agreement increases the state EITC from 15 percent of the federal credit to 23 percent of the federal credit. A release from Baker's office when he signed the tax credit expansion in August said the change means "as much as $500 in additional support for those who are eligible."

The higher credit has taken effect, but first applies to tax year 2016.

More than 400,000 tax filers have claimed the Massachusetts EITC annually in recent years, the governor's office added.

And, per State House News Service, both Baker and Senate President Stanley Rosenberg have said they want to see further hikes in the EITC.

There's a long-running debate about the efficacy of the minimum wage and the EITC as tools for lifting up low-income workers. Some critics, for instance, say higher pay floors increase labor costs, forcing employers to raise prices and/or reduce other wages, benefits or positions. Others say the EITC works best when it works in tandem with a minimum wage hike.

2016 also brings some modest relief to all Massachusetts income tax filers. The state income tax falls from 5.15 percent to 5.1 percent this year -- the result of a 2002 law that reduces the tax rate in increments of 0.05 percent if Massachusetts hits certain revenue growth benchmarks.

Though collectively the rate reductions have, in recent years, had a big impact on revenues and the state budget, the 2016 rate reduction will save individual taxpayers an average of just $30 per year, the state Senate budget chief has said.

In addition to Massachusetts and California, 12 other states are raising their minimum wages this year, according to an analysis by the National Employment Law Project, and reported by The Huffington Post. Three of those states are in New England -- Connecticut, Rhode Island and Vermont. All three now have $9.60-an-hour pay floors.