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December 5, 2016 Editorial

Helping those left behind

We've got a new president entering the White House in 2017, and there is no question that a large part of his winning formula was in appealing to the millions of American workers who have largely been left behind by a mix of globalization and shifts in the economy.

Americans in the top income percentages have seen significant jumps in income while too many have seen wages stagnate and their prospects dim. Nationally, middle-class and blue-collar workers have lost nearly $18,000 in annual household income since 1979 due to the rising wage gap with the upper class, according to Washington, D.C. think tank Economic Policy Institute. How the federal government will go about raising the prospects for those left behind, or at least evening the playing field a little, remains to be seen.

But it seems clear that there is political momentum around ending that entrenched wage stagnation. How to do that in a fair and balanced manner is clearly up for debate – and finding a solution that is palatable to both workers and employers may well prove elusive – but we've got to try. Legislation that bites off too big a shift can cause unnecessary disruption for employers, ultimately hurting the very workers it aims to help.

On the state level, the legislature appears poised to consider further increases in the minimum wage, which will produce an interesting debate with much at stake. Massachusetts minimum wage is $10 per hour and will increase to $11 per hour as of Jan. 1. Labor activists and the Massachusetts Senate are already talking about increasing this to $15 per hour sometime in the near future. Lieutenant Gov. Karyn Polito already said she isn't opposed to the idea, although she did say it would be better to wait until to see how the change to $11 will impact the economy. Massachusetts House Speaker Robert DeLeo advocated a similar wait-and-see approach.

The $11-per-hour change represents the last piece of a three-year, phased-in increase to the minimum wage. As Massachusetts lawmakers head into session next year, we encourage them to begin conversations in earnest about starting another phased-in program that will bring wages up over time to the $15 per hour target. Investments like this keep a strong workforce in the state, but phasing those increases in over several years gives the business community the chance to adjust and plan.

Before a federal judge halted its implementation two days before Thanksgiving, the U.S. Department of Labor and businesses across the nation were preparing for the Dec. 1 change to the overtime exemption law, which would have made salaried employees making less than $47,476 annually eligible for time-and-a-half pay, up from the previous threshold of $23,600.

Sure, a change from the $23,600 level was clearly justified, but more that doubling the threshold in one fell swoop – and the level of additional administration required to comply with other elements of the law – were clearly overreaching. However, would the legislation have received as much push back if the minimum were raised by $5,000 a year for four consecutive years? Likely not.

The federal executive branch will have to kick this issue over to the legislative level to solve the current legal impasse – per the judge's ruling. The overtime exemption needs raised to a reasonable level that separates the well-compensated, production-oriented positions from the overworked, glorified hourly positions.

Now with a chance to rework a new version of the law, we encourage lawmakers to come up with a plan to prop up the income of many Americans who have not participated sufficiently in the country's economic growth.

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