Maine is poised to weaken its minimum wage law. What will Democrats allow?

The key group of Democrats who support re-establishing the tip credit is holding firm.

Published April 05, 2017, at 4:07 p.m.     |    

Maine is poised to weaken its minimum wage law. What will Democrats allow?

Posted April 05, 2017, at 4:07 p.m.
Last modified April 05, 2017, at 7:16 p.m.

AUGUSTA, Maine — Well-organized factions on either side of Maine’s voter-approved minimum wage increase sent hundreds to the State House on Wednesday to lobby lawmakers about proposed changes to roll back the new law.

The most heat is around what is known as the “tip credit” — or the customer subsidy allowing restaurant owners to pay servers a base wage lower than Maine’s minimum wage as long as their tips get them up to the regular minimum wage threshold.

The law passed by voters in November raised Maine’s regular hourly minimum wage from $7.50 to $9 in 2017, putting it on track to reach $12 by 2020. The tipped minimum rose from $3.75 to $5 and will reach the regular rate by 2024, which has rankled the industry and many servers.

The tip credit changes could be most likely to go, but Democrats are holding firm against challenges to the rest of the law. The next question is whether some of them will coalesce around a proposed “training wage” aimed at keeping younger people in the workforce.

The key group of Democrats who support re-establishing the tip credit is holding firm, but they’re aligned with their party on the rest of the law. An estimated 200 people — made up largely of servers aligned with the the industry-affiliated Restaurant Workers of Maine and those aligned with the progressive Maine People’s Alliance — told differing stories about the law’s early and anecdotal impact on Wednesday.

One side said customers are tipping less and servers are making less money; the other said tipping practices haven’t changed and the higher base wage has lessened uncertainty about earnings.

But lawmakers have already divided themselves: Eight legislative Democrats drew heat from the Maine People’s Alliance in March after co-sponsoring Republican proposals to roll back the tip credit changes. There’s no sign that those Democrats are wavering on the issue.

Reps. Robert Alley of Beals and Martin Grohman of Biddeford said they still favor reinstating the tip credit. Alley said he’s heard from progressives all over the country but the most convincing arguments have been from restaurants in his district.

“I’d rather be in the middle of the road and if I can help this one over here and they want the tipped wages, let them have it,” Alley said, “and if someone over here wants the minimum wage, then I’ve done both.”

Assistant House Majority Leader Jared Golden, D-Lewiston, said there may be room for compromise on the tip credit, though he doesn’t agree it should be reinstated and said Democrats see the $12 wage broadly as “significantly important for the health of our economy.”

Assistant House Minority Leader Ellie Espling, R-New Gloucester, agreed that it’s possible that Republicans and some Democrats could reach accord on reinstating the tip credit, but she doesn’t see much chance of the minimum wage hike being repealed or altered.

“To me, the tip credit and this minimum wage stuff is coming from the more progressives,” she said. “I think they’re really out of touch with what really impacts Mainers on a day-to-day basis.”

Another debate could be brewing about a training wage for younger workers, but it’s unclear whether Democrats will coalesce around it. Alongside bills on the tip credit, the Legislature’s labor committee took testimony on other bills that would establish lower minimum wages for younger workers.

One, from Rep. Jeff Timberlake, R-Turner, would set a hourly minimum at $8.25 for people age 20 and younger. Timberlake, who owns a hardware store and apple orchard, said “there’s not going to be any kids working” unless the Legislature sets a training wage for younger workers.

Golden said there is little Democratic support for bills that seek to implement a lower training wage or pay minors less than other workers, calling them “all off-limits to our caucus.”

But it’s not off-limits to some Democrats: Timberlake’s bill is co-sponsored by Sen. Justin Chenette, D-Saco, who said the issue was brought to him by Funtown Splashtown USA, the landmark amusement park in his city employing high-schoolers seasonally.

Chenette said he’s not sure whether he’d vote for a training wage and ruled out voting to change the tip credit or other parts of the law. But he said the training wage “was not part of the referendum language” and that it’s “worth having that conversation” with businesses.

Grohman said it’s an issue worth considering, but he “wouldn’t support it if I didn’t think it helped people get jobs.”

“We all want the same thing: We want people to make more money and we want people to have great jobs,” he said. “We’re just disagreeing about which policy is the right way to achieve that.”

Members of both parties said they know they are walking a fine line when they consider changes to a citizen-initiated referendum. Espling said she does not worry about backlash from constituents if the Legislature changes the law.

“This whole subverting the will of the voters argument is just kind of mind-boggling to me,” she said. “We had the marijuana question where kids could possess pot. You can’t just go by ‘we have to rubber stamp everything the voters put in these things.’ … It’s our responsibility to carefully look at it all and understand the impacts.”

Golden said he would support a mechanism — which so far has not been proposed — that would slow down the minimum wage or tipped credit increases if there were data-driven indicators that it was hurting wages or the economy.

“I like this idea of building in some kind of trigger mechanism that would put a freeze on the law moving forward if there was clear, strong evidence that it was depressing anyone’s wages, forcing businesses out of business or hurting the economy,” said Golden. “I’m not going to take the Chamber of Commerce’s word on it. I’m just looking for hard facts.”

One of the bills under consideration would establish a study commission to do what Golden suggests. All 10 bills that were introduced Wednesday will be considered by the committee and full Legislature in the coming weeks.

 

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