Amherst special Town Meeting to consider $15 minimum wage proposal opposed by Select Board, businesses

Last modified: Tuesday, March 18, 2014
AMHERST — A special Town Meeting on Wednesday will consider a proposed higher minimum wage in town to address what petitioners call a poverty crisis affecting the Amherst community.

But the Select Board and the Amherst business community are asking Town Meeting to reject the proposal, saying that any increase in the $8 per hour minimum wage should be done at the state level, rather than through a local home-rule petition.

Business representatives argue that such an increase could have a negative impact on restaurants and shops, while Select Board members Monday cautioned that a vote in favor of the article would have a chilling effect on businesses.

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Select Board Chairwoman Stephanie O’Keeffe said unilaterally asking the state Legislature to increase the minimum wage is not a good idea. “The message will be that Amherst is willing to destabilize commercial viability,” O’Keeffe said.

The Finance Committee on Thursday unanimously voted against recommending the article to Town Meeting, with estimates showing the town would have to pay about 200 employees an additional $220,000 annually.

Matthew Cunningham-Cook, the lead petitioner, argues that the poverty rate is more than 20 percent in Amherst because of the low wages being paid, predominantly to students who work in some capacity for the University of Massachusetts.

“Amherst has a poverty crisis, and the only way to properly address it is through higher wages,” Cunningham-Cook said.

The Student Labor Action Project at UMass, which has organized around labor practices, determined that one of the key barriers for students being able to organize was so many working two or three low-wage jobs, he said.

“UMass is a microcosm of the inequality crisis happening in our country,” Cunningham-Cook said.

He added that the proposal will provide an exemption for businesses with fewer than 50 employees, allowing the measure to focus on UMass and Amherst and Hampshire colleges as the three primary low-wage employers in town.

Sarah la Cour, executive director of the Amherst Business Improvement District, wrote in a letter to the Select Board and Finance Committee opposing the proposal:

“It is our opinion that this article is ill-timed and if passed would be extremely detrimental to Amherst’s economic health and viability. The town must not act in isolation on an issue such as this as it would seriously affect a majority of town businesses, as well as the municipality and its institutions of higher education.”

The state Legislature, la Cour wrote, is already pursuing a bill to raise the minimum wage from $8 to $11 incrementally over three years. “We believe that this is the proper location and process for a discussion of this issue,” she added. “The state level is where meaningful progress can be made on raising the minimum wage to a standard that can bring better financial stability throughout the commonwealth.”

The Amherst Area Chamber of Commerce has taken a similar position. A statement released by interim executive director Joan Temkin on behalf of its board of directors states: “This 87.5 percent increase from $8 per hour would nearly double the average payroll for many (of the) town’s small businesses. Consequently, passage of this warrant article would create a catastrophic effect for the community as a whole by forcing local businesses to move to other towns, file bankruptcy, cut jobs and/or increase their sales prices exponentially above the regional market; rendering Amherst businesses unable to compete with neighboring towns.”

Town Manager John Musante said he will provide Town Meeting information about the seasonal and part-time employees and positions affected by the minimum wage hike, such as those who work for Leisure Services and Supplemental Education, the Conservation Department and the Jones Library.

W.D. Cowls President Cinda Jones also sent an email to the Select Board, estimating that raising the minimum wage to $15 would add $50,000 to the part-time and entry-level positions.

“Sales generated at our business could not support that additional payroll expense so we would have to eliminate two positions to compensate for that increased salary expense on our bottom line,” Jones wrote.

Jones suggested this would also increase costs for other employers.

“I believe this drastic increase in minimum wage would cause some existing businesses to close and would drive potential business investors to locate their businesses in neighboring towns where there would be more reasonable employee expenses,” Jones wrote.

The inspiration for the increase in minimum wage, Cunningham-Cook said, comes from SeaTac, Wash., where a similar measure has been adopted.

He disagrees that the measure would cost jobs, saying there is no evidence that a minimum wage increase causes a burden to businesses. In fact, Cunningham-Cook said, the opposite would be true, as a minimum wage increase means more money in the pockets of students and thus a greater demand for local products.

At UMass, he said, the difference could come out of salaries of well-paid administrators.

Cunningham-Cook said if the measure is rejected by Town Meeting, he would seek a townwide ballot vote later in the year. “If Town Meeting votes no, we think voters should have the opportunity to decide,” he said.