Massachusetts minimum pay may be $10.50 by ’16

A proposal unveiled by House Speaker Robert A. DeLeo yesterday to raise the minimum wage to $10.50 per hour by 2016 reignited a debate among business owners and leaders, with some saying government shouldn't be setting the standard for employee pay.

"We don't think it's the role of government to push up the minimum wage," said Chris Geehern, a spokesman for Associated Industries of Massachusetts, one of the state's largest business groups. "We don't think it's the most efficient way of raising people's standards of living."

But Paul Guzzi, Greater Boston Chamber of Commerce president, said DeLeo has his group's backing.

"We will support a raise in the minimum wage because for a number of reasons it is the right thing to do," said Guzzi.

DeLeo's proposal, unveiled in a speech to the Greater Boston Chamber of Commerce and first reported on bostonherald.com, would raise the state's $8 per hour minimum wage to $10.50 over three years. It is less generous than a bill the state Senate approved last November that would increase the wage to $11 per hour and index future changes to inflation.

"In terms of not tying it to economic factors and inflation, again when I talked to business groups ... one of the major factors that I see ... or hear, is the fact of predictability relative to expenses and taxes," DeLeo said.

The speaker is also calling for unemployment insurance reform, including moving from a one-year to a three-year payroll average that DeLeo said would ease the burden on "most" employers. Guzzi said the Chamber supports reforming unemployment insurance alongside an increase in the minimum wage.

President Obama has proposed increasing the federal minimum wage to $10.10 per hour, and U.S. Secretary of Labor Thomas Perez was in Cambridge yesterday, advocating for the change. "It's the smart thing to do," Perez said.

He met with local small business owners like Glynn Lloyd, owner of City Fresh Foods in Roxbury, who said he pays his workers an average of $13 per hour.

"Probably one of our most important assets is our employees," Lloyd said. "At the end of the day it's the right thing to do."

Rachel Kaprielian, state secretary of labor and workforce development, said it's up to the Legislature to figure out the specifics on a wage hike.

"We have proposals now that are being talked about and discussed, so it looks to me like that's something that has real legs in this state," she said.

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Obama overtime plan already stirring controversy

WASHINGTON — President Barack Obama's move to make more workers eligible for time-and-a-half overtime pay is being hailed by Democrats who see it as a potent midterm election issue and condemned by Republicans and business leaders as presidential overreach. Supporters say it will help the still fragile economy, critics say it will damage it further.

It is likely to affect millions of American workers.

"From my perspective, they have to be pulling numbers out of the air right now," said Washington labor lawyer Tammy McCutchen, referring to the conflicting claims by partisans that it would either help or hurt the economy. "We don't even know what the policy is going to be."

She's closer to the process than most. As administrator of the Labor Department's Wage and Hour Division during the George W. Bush administration, McCutchen oversaw the last rewrite of the program in 2004.

Currently, salaried workers making more than $455 a week, or $23,660 a year, aren't eligible for time-and-a-half overtime if some of their work is considered supervisory, even though many spend most of their day doing manual, clerical or technical work with few management duties.

Obama signed a presidential memorandum on Thursday directing the Labor Department to devise new overtime rules "to ensure that workers are paid fairly for a hard day's work." He's tossing out most of the rules McCutchen wrote in the process.

"Well, it's going to be bad for business," she said in an interview. "It's going to be good for my bottom line. Lawyers all over the country are going to be making a lot of money."

She called the rules "my babies. I spent two years of my life working on them. It's personal for me. It's going to be very sad to see them taking out a lot of the stuff I put in," she said.

But she also warned that the Obama administration should expect a rocky road ahead in implementing whatever new policy emerges — just as the Bush administration faced last time around.

Those close to the process suggest it will take 12 months to 18 months for the agency to complete its new assignment.

The move clearly has angered business groups and congressional Republicans, but it fits in with the overall Democratic midterm election game plan of focusing on income inequality and the middle class at the same time the stock market has soared.

"This will help to build an economy that honors work, not one that steals from workers," AFL-CIO President Richard Trumka said. "While workers are denied overtime pay that they have earned, compounding flat and falling wages, the bonus pool for Wall Street grew from $1.9 billion in 1985 to $26.7 billion in 2013 — an average annual increase of 14 percent in nominal terms."

Business and conservative groups argue that Obama's order will have the opposite effect of what is intended and could lead businesses to reduce the number of employees or cut pay, resulting in a drag on national economic growth.

"The federal government, in particular, shouldn't be involved in labor markets in any way, shape or form," said Jeffrey Miron, director of economic studies at the Cato Institute, a libertarian think tank, and a Harvard University economics professor. "It shouldn't be setting hours legislation and it shouldn't be providing union protection."

The order was the latest in a series of executive actions Obama has taken in an end run around congressional Republicans, who have blocked many of his proposals. With Congress blocking his attempt to raise the federal minimum wage from $7.25 to $10.10 an hour, he used his executive powers to raise it to that level for government contractors.

Thursday's presidential memorandum is aimed at workers who make more than the federal minimum but are ineligible for overtime pay under present law because they are designated as management, even when they have little or no supervisory responsibilities.

"If you're making $23,000, typically you're not high in management," Obama said in unveiling the initiative.

The White House contends the 2004 revisions to the 1938 Fair Labor Standards Act are outdated and allow employers to exempt too many workers from overtime pay.

Despite the contrary claims of Democrats and Republicans as to the economic impact of Obama's move, economists suggest any such impact will be minimal.

"Be a boom to employment among lawyers, but otherwise not a big deal," said Mark Zandi, chief economist at Moody's Analytics.

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Sam Adams brewer backs out of parade over gay-rights flap

Boston Beer Co., the brewer of Samuel Adams, has pulled its sponsorship from the South Boston St. Patrick's Day Parade amid controversy over the organizers' refusal to let gay veterans march, the company announced in a statement.

"We have been participating in the South Boston St. Patrick's Day Parade for nearly a decade and have also supported the St. Patrick's Day breakfast year after year," the company said in a statement. "We've done so because of the rich history of the event and to support veterans who have done so much for this country."

Company representatives have marched in the parade in past years, but annoucned today they will not participate this year because of the breakdown in communications between gay-rights group MassEquality and the parade organizers, Allied Veterans War Council.

"We were hopeful that both sides of this issue would be able to come to an agreement that would allow everyone, regardless of orientation, to participate in the parade. But given the current status of the negotiations, we realize this may not be possible." the company said.

Yesterday, the South End bar Club Cafe threatened to stop selling Samuel Adams "until such time as either the Parade organizers change their position, or Sam Adams removes its support of the St. Patrick Day Parade."

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Jetblue’s NYC-Hyannis service takes off in June

Cape Cod is bracing for an even bigger wave of New Yorkers this year now that JetBlue has announced new daily direct seasonal flights between Hyannis and John F. Kennedy International Airport.

"In summer, New York's our primary market," Cape Cod Chamber of Commerce CEO Wendy Northcross said. "They really like Cape Cod, and they are really willing to jump in the car for five hours to be here. If they can get on an airplane and be here in (56) minutes ... we think that's amazingly important."

JetBlue, which will be Barnstable Municipal Airport's first major carrier, will run the flights on 100-passenger E190s from June 26 to Sept. 9, with one daily flight each way.

It's the airport's first service to a major New York airport since Colgan Air ended its longtime seasonal US Airways Express flights to LaGuardia in 2009. JetBlue partner Cape Air started seasonal flights between Hyannis and White Plains, N.Y., last year and will continue the service.

"For now, (JetBlue is) looking at seasonal to see how the market works out," assistant Barnstable airport manager Frank Sanchez said. "They didn't make a promise, but they want to make it more than seasonal the following year."

The airport has hired a consultant to help attract other commercial airlines, and there have been talks with Colorado's Allegiant and Toronto's Porter Airlines about Hyannis service, according to Northcross.

"The more airlines we can get to Hyannis, the better," said Paul Zuest, managing director of the Chatham Bars Inn. "Our business is New York, Connecticut, Rhode Island and the Boston area. That's our bread and butter."

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Rule targets for-profit colleges over student debt

WASHINGTON — The for-profit college industry says it will vigorously oppose proposed regulations by the Obama administration designed to protect students at for-profit colleges from amassing huge debt they can't pay off.

The proposed regulations would penalize career oriented programs that produce graduates without the training needed to find a job with a salary that will allow them to pay off their debt. Schools, for-profit or not, that don't comply would lose access to the federal student aid programs.

"Career-training programs offer millions of Americans an opportunity they desperately need to further their education and reach the middle class," Education Secretary Arne Duncan told reporters Thursday. "Today, too many of these programs fail to provide students with the training that they need at taxpayers' expense and the cost to these students' futures."

If finalized, the regulations would take effect in 2016.

In 2012, the for-profit colleges convinced a judge that similar regulations were too arbitrary. Steve Gunderson, president and CEO of the Association of Private Sector Colleges and Universities, said in a statement that the proposed regulations would "deny millions of students the opportunity for higher earnings." His association argues that the regulations would have a long-term impact on the nation's ability to address workforce demands and improve the economy, and he called the proposed regulations "discriminatory" and "punitive."

For-profit programs are popular among non-traditional students, some of who have been laid off during the economic downturn.

"The government should be in the business protecting opportunity not restricting it," Gunderson said. He said no decision has been made on whether more legal action will be taken.

The administration has long sought to block federal student aid from programs that do not prepare students for "gainful employment" in a recognized occupation. The programs covered under the proposed regulations include nearly all programs at for-profit schools, as well as certificate programs at public and private non-profit institutions, such as community colleges, according to the Education Department.

Duncan said for-profit colleges can receive up to 90 percent of their revenue from federal financial aid programs. If blocked from participating, some could be forced to close, he said.

"Some of these programs — whether public, private or for-profit — empower students to succeed by providing high-quality education and career training. But many of these programs, particularly those at for-profit colleges, are failing to do so," the Education Department said in a fact sheet.

On Capitol Hill, Sen. Tom Harkin, D-Iowa, the chairman of the Senate Committee on Health, Education, Labor and Pensions, said he was concerned that the proposed regulations don't go far enough in protecting students.

But Republicans criticized the administration's actions and said low-income students would be disproportionately affected.

"At a time when demand is great and the stakes are high, government should focus on increasing education opportunities, not unjustly penalizing institutions that are trying to prepare students and workers for a changing economy," said Rep. John Kline, R-Minn., chairman of the House Education and Workforce Committee.

The latest proposal closely follows those that were struck down in 2012 by U.S. District Judge Rudolph Contreras, but it makes technical changes tailored to the court's concerns that the benchmarks were arbitrary.

"We tried to base that on expert research and mortgage industry standards for acceptable levels of debt," Duncan said.

For instance, a typical graduate should not pay more than 20 percent of his or her discretionary income to repaying loans. The previous regulations sought a limit of 30 percent of that income going to repayment.

The proposed regulation also says graduates should not be paying more than 8 percent of their total income to student loans. The department previously sought a 12 percent cap.

The proposed regulations also set a default rate of no more than 30 percent.

In many cases, students who graduate from Education Department-approved programs would keep a greater percentage of their paychecks in their pockets.

Education Department reports show for-profit programs account for about 13 percent of all college students but 46 percent of all loan defaults.

At the same time, 22 percent of for-profit student borrowers defaulted on their loans within three years. At public colleges, that number is 13 percent of borrowers.

And for schools that the Education Department could review, 72 percent of for-profit colleges produce graduates who earn less than high school dropouts.

Duncan said the proposed regulations "target those who are both failing students and taxpayers."

The public has 60 days to comment on the proposed regulations.

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AP Education Writer Kimberly Hefling contributed to this report.

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Firm to help find cures for children

Although their stories differed in detail, they shared a passion and a purpose no parent would envy: finding a cure for the diseases that afflict — and, in some instances, might one day kill — their children.

At the ribbon-cutting yesterday for Intellimedix, the newest member of the Cambridge biotech cluster, a group of men spoke from personal experience about parent-driven innovation in the high-stakes world of scientific research.

Motivated by his daughter's Dravet syndrome, a severe seizure disorder that doctors told him couldn't be cured, Daniel Fischer co-founded Intellimedix to accelerate the discovery of new drugs, as well as repurpose old ones, to treat neurological diseases. His daughter recently started a new drug and has been seizure-free for a month.

"My advice to parents is don't accept whatever you hear from doctors," he said. "My other message is don't do it alone. You need academia. You need big pharma."

Eleven years ago, Brad Margus learned that two of his sons had a rare, lethal genetic disease that combined a loss of muscle control with cancer and immune deficiency.

While running his company, Margus studied molecular genetics, formed a nonprofit, raised $30 million, set up a clinic at Johns Hopkins Hospital and coordinated clinical trials.

"The good news is the science is not really predictable," he said. "A lot of (the breakthroughs) are based on serendipity."

When Harvey Lodish and seven other MIT professors founded Genzyme in 1981, he never imagined that Cerezyme, a drug he helped develop, would one day be used to treat his grandson for Gaucher disease.

"You never know who's going to benefit from what you do in the lab," said Lodish, chairman of the Massachusetts Life Sciences Center's Scientific Advisory Board.

Parents, he said, play an "enormous" role in raising money to support early-stage research.

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Rents for Chelsea’s new high-end apartments beat Boston prices

Those looking for relief from the high rents in the Hub's new luxury apartment buildings have an option — cross the Tobin Bridge into Chelsea and pay half of what you'd pay downtown.

There's a wave of new development in Chelsea, with lots of hotels, two retail centers, a new FBI regional headquarters as well as an influx of market-rate apartments. A Silver Line expansion from South Station will bring four new stations to Chelsea starting in 2016, and a new MBTA commuter rail station will be built.

Just off Bellingham Square, the so-called Box District — a former industrial area along Library and Highland streets and Gerrish Avenue once dominated by cardboard box manufacturers — is seeing three market-rate projects totaling 149 units developed by Boston's Mitchell Properties. The 53 units at Atlas Lofts are fully leased, and the 46-unit Flats at 44 just opened this week.

The units at Flats at 44 feature granite counters, bamboo floors and in-unit laundries, and the complex has a fitness center, common roof deck and free parking. Studios starting at $1,315 per month, one bedrooms at $1,550 and two bedrooms at $1,975 are attracting price-sensitive renters.

"People coming from Boston say, 'Wow,' " said Romell Kidd of HallKeen Management, property manager for Mitchell's Chelsea properties. "It's not a utopia here, but renters are savvy and can see the pros and cons. And they see that they can get a great alternative pricewise here in Chelsea."

Kidd says 30 percent of the Flats at 44 units are leased.

"I'm telling people that if you want an urban feel and save some money on rent, get into Chelsea now," said Courtney Mathiowitz, marketing manager for HallKeen.

Mitchell's third property, The Flats at 22, a 50-unit complex, is slated to break ground this fall.

Other luxury apartment developments are near completion and even expanding.

One North, a 230-unit high-end apartment complex just off the Tobin Bridge approach, is wrapping up construction one block from Chelsea's commuter rail station.

These new apartments, built by the same developer who did Maxwell's Green in Somerville, have high-end amenities such as an indoor pool, yoga studio and even doggie day care. Studios at One North start at $1,395, one bedrooms at $1,530, two bedrooms at $1,850 and three bedrooms at $2,450. Outdoor parking is free for one vehicle, and garage parking $75 extra per month.

One North has 20 percent of its apartments leased ahead of its opening next month.

"We're drawing young professionals priced out of the Boston/Cambridge market and empty nesters from the North Shore looking to live closer to the city," said Damian Szary, a principal at Gates Residential, which is co-developing the project with Transdel Corp., another Hub developer. "We're bringing the same level of quality as the new Hub luxury buildings at half the price."

Szary says that the project's second phase will add another 220 units to One North, with plans to break ground by the end of the year.

Federal Realty Investment Trust — the developer of Assembly Square in Somerville — is adding a 30-unit second phase to Chelsea Place, a 56-unit high-end apartment complex along Route 16 adjacent to its Chelsea Commons retail development. The first phase, which opened in July, has a fitness center and community room, opens out onto Mill Creek Park and is fully leased — with one bedrooms renting from $1,470, two bedrooms from $1,780 and three bedrooms from $2,155.

The property is getting a lot of residents from out of state, including young professionals, young families and foreign graduate students, according to Jerry Lemmon, senior vice president of WinnResidential.

"The reason why they're coming is that Chelsea is a great location for convenience to Boston, Logan airport, and shopping and dining on Route 1." 

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BP regains ability to do work for government

WASHINGTON — The oil company behind the largest offshore oil spill in U.S. history can once again perform work for the federal government.

Under an agreement reached Thursday with the U.S. Environmental Protection Agency, more than two dozen BP entities and its Houston-based oil production and exploration arm can secure new government contracts.

The company had been suspended from performing any new government work since November 2012, after BP agreed to plead guilty and to pay a $4.5 billion fine for criminal charges involving the death of 11 workers and lying to Congress about how much oil was spilling into the Gulf of Mexico.

The temporary ban barred the oil company for 16 months from leasing more offshore oil and gas properties and renewing fuel contracts with the U.S. military. The decision comes just before the Department of Interior will offer more than 40 million acres for oil and gas exploration and development in the Gulf of Mexico in March lease sales.

For five years, BP will have to abide by a series of ethics, safety and other requirements. An independent auditor will also verify its compliance with the deal.

The company also agreed Thursday to drop its lawsuit challenging the suspension.

"Today's agreement will allow America's largest energy investor to compete again for federal contracts and leases," said John Minge, chairman and president of BP America, Inc., in a statement.

The new chair of the Senate Energy Committee, Sen. Mary Landrieu, praised the agreement.

"BP has rightly been held responsible in a court of law and should continue to make whole the individuals and businesses that were impacted by the oil spill, but barring them from entering new contracts on top of that amounted to double jeopardy and set a terrible precedent that I hope will not be repeated," said Landrieu, D-La. "The good news is that BP will now be able to participate in next week's lease sale that will bring much-needed revenue to Louisiana and other oil-producing states along the Gulf Coast."

Tyson Slocum, director of Public Citizen's Energy Program, criticized the move for letting BP "off the hook." The company "has failed to prove that it is a responsible contractor deserving of lucrative taxpayer deals," he said.

The April 2010 spill occurred after BP's Macondo well blew out, causing the Deepwater Horizon drilling rig to explode, killing 11 workers. Millions of gallons of oil spewed into the Gulf, with crude soiling shoreline and beaches from Louisiana to Florida.

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Follow Dina Cappiello on Twitter at http://www.twitter.com/dinacappiello

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Dems grapple with dilemma on Keystone XL pipeline

WASHINGTON — Democrats are grappling with an election-year dilemma posed by the Keystone XL oil pipeline.

Wealthy party donors are funding candidates who oppose the project — a high-profile symbol of the political debate over climate change. But some of the party's most vulnerable incumbents are pipeline boosters, and whether Democrats retain control of the Senate after the 2014 midterm elections may hinge on them.

The dilemma was highlighted Thursday as President Barack Obama's former national security adviser — and now a consultant to the oil industry — said Obama should approve the pipeline to send Russian President Vladimir Putin a message that "international bullies" can't use energy security as a weapon.

The comments by retired Gen. James Jones came as a top Democratic donor again urged that the pipeline be rejected.

Tom Steyer, a billionaire environmentalist, has vowed to spend $100 million —$50 million of his own money and $50 million from other donors — to make climate change a top-tier issue in the 2014 elections.

Steyer, who opposes Keystone, declined to say whether he would contribute to Democrats who support the pipeline, including Sens. Mary Landrieu of Louisiana, Mark Begich of Alaska, Mark Pryor of Arkansas and John Walsh of Montana. All face strong challenges from Republicans in energy-producing states where Obama lost to Mitt Romney in 2012.

Still, a spokesman said Steyer believes Democratic control of the Senate is important from a climate perspective.

Jones told the Senate Foreign Relations Committee that the Canada-to-Texas pipeline is a litmus test of whether the U.S. is serious about national and global energy security. Approval of the pipeline would help ensure that North America becomes a global energy hub and a reliable energy source to the U.S and its allies, Jones said. Rejecting the pipeline would "make Mr. Putin's day and strengthen his hand," he said.

Jones, who left the Obama administration in 2010, now heads a consulting firm that has done work for the American Petroleum Institute, the oil industry's chief trade group, and the U.S. Chamber of Commerce. Both groups support the pipeline.

Landrieu, who chairs the Senate Energy Committee, pressed Secretary of State John Kerry on the pipeline issue Thursday at an appropriations hearing. Landrieu called approval of the pipeline "critical" to the national interest and said that in Louisiana, "it's hard for us to even understand why there is a question" whether it should be approved. The State Department has jurisdiction over the pipeline because it crosses a U.S. border.

Kerry told Landrieu he was "not at liberty to go into my thinking at this point," but added: "I am approaching this, you know, tabula rasa. I'm going to look at all the arguments, both sides, all sides, whatever, evaluate them and make the best judgment I can about what is in the national interest."

Polls show Americans support the pipeline, with 65 percent saying they approved of it in a new Washington Post-ABC News poll. Twenty-two percent of those polled opposed the pipeline.

Steyer, a former hedge fund manager, spent more than $10 million to help elect Virginia Gov. Terry McAuliffe and Sen. Edward Markey, D-Mass., last year. In a conference call with reporters Thursday, Steyer declined to comment on where his advocacy group, NextGen Climate Action, would spend money this fall. But he noted the views of Landrieu and other endangered Democratic incumbents were well known.

"I think those senators voted on this long before 2014," he said, "so I don't think there's any real change here."

Steyer hosted a fundraiser last month at his San Francisco home attended by at least six Democratic senators, including Senate Majority Leader Harry Reid of Nevada. The event, which raised $400,000 for the Democratic Senatorial Campaign Committee, also was attended by former Vice President Al Gore, who said the party needs to make global warming a central issue in the midterm elections.

Chris Lehane, a Democratic strategist who advises Steyer, has said the group would not go after Democrats, even those who support the pipeline.

"We're certainly not subscribing to what I would call the tea party theory of politics," Lehane said. "We do think it's really, really important from a climate perspective that we maintain control of the Senate for Democrats."

Steyer said Thursday he has not decided whether to spend money in Colorado, where Democratic Sen. Mark Udall is likely to be challenged by GOP Rep. Cory Gardner. Udall was among more than 30 Democratic senators who engaged in a talkathon urging action on climate change this week, but he has largely stayed out of the Keystone fight. Udall voted against budget amendments urging both support and rejection of the pipeline, arguing that they injected politics into a process that should remain at the State Department.

Udall wants to evaluate the project "on the merits and using objective, scientific analysis," said spokesman Mike Saccone.

Senate Foreign Relations Chairman Robert Menendez, D-N.J., said he hoped Thursday's hearing would offer "a balanced, thoughtful" approach that "puts aside some of the politics that have surrounded this debate" over the pipeline.

"We are here to find answers and shed more light than heat on the issue," Menendez said, although the hearing soon devolved into a series of claims and counterclaims.

The $5.3 billion pipeline would carry oil derived from tar sands in western Canada through the U.S. heartland to refineries on the Texas Gulf Coast.

Pipeline supporters, including lawmakers from both parties and many business and labor groups, say the project would create thousands of jobs and reduce the need for oil imports from Venezuela and other politically turbulent countries.

Opponents say the pipeline would carry "dirty oil" that contributes to global warming. They also worry about possible spills.

The State Department said in a Jan. 31 report that building the pipeline would not significantly boost carbon emissions because the oil was likely to find its way to market no matter what. Transporting the oil by rail or truck would cause greater environmental problems than the pipeline, the report said.

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Associated Press writer Matthew Lee contributed to this report.

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Follow Matthew Daly on Twitter: https://twitter.com/MatthewDalyWDC

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Attorneys wrap up arguments in Madoff worker trial

NEW YORK — Lawyers have made their final arguments to jurors in the first criminal trial to result from Bernard Madoff's epic fraud.

Summations wrapped up Friday in the trial of five former Madoff employees. A judge still needs to give lengthy legal instructions, so deliberations now look likely to start Monday.

Jurors will have to weigh whether the workers were Madoff's conspirators or his dupes.

Madoff has said he acted alone in cheating thousands of investors out of nearly $20 billion in a decades-long Ponzi scheme. But federal prosecutors say five back-office subordinates gave him vital help in weaving his financial fiction.

The defendants say they, like Madoff's investors, were fooled by a master at deceit.

Madoff pleaded guilty and is serving a 150-year prison sentence.

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