Last week, about 59,000 workers in Maine got a raise. This is thanks to a state law that is increasing the state’s minimum wage in $1 increments each year until it reaches $12 an hour.
On Jan. 1, the state’s minimum wage rose to $10 an hour. The increase will result in nearly $80 million in additional wage income, money that will flow through the Maine economy.
And, despite dire warning that raising wages would lead to job losses, job growth continued in Maine. Between January and June of last year, an additional 8,000 Mainers found jobs. Employment increased in nearly every industry, including low-wage industries, such as retail, restaurants and accommodations, according to an analysis by the Maine Center for Economic Policy.
The data show that increasing Maine’s minimum wage is working as intending, increasing the buying power of thousands of Mainers, which stimulates the economy and triggers additional job growth.
Given this, there is no reason to stop, reverse or limit Maine’s minimum wage increase. That’s exactly what Gov. Paul LePage, an opponent of increasing the state’s minimum wage, is trying to do.
The wage increase was approved by voters in 2016 after the Legislature repeatedly failed to increase Maine’s minimum wage. Before the referendum, Maine’s minimum wage was $7.50 an hour.
The LePage administration wants to rollback what the voters approved. Through LD 1757, the Department of Labor seeks to rollback Maine’s minimum wage to $9.50 an hour, with 50-cent increases each year until it reaches $11 an hour in 2021. It would eliminate annual cost of living adjustments, which were also part of the referendum.
This is unnecessary and will be especially hurtful to Maine’s lowest wage workers, who are finally making progress toward a livable wage. Pushing the earning of these workers back down will benefit no one, including their employers.
The bill would also create a lower minimum wage for workers under 18 and a training wage for workers between 18 and 20 for the first three months they are on a job. Both have been proposed previously by LePage.
There is no reason for Maine to take these steps backward.
There is long-standing evidence that increasing the wages of low-wage earners is one of the best ways to stimulate the economy, because these workers spend their money on goods and services. Wealthier individuals tend to invest or save money they receive from raises or tax cuts. Every extra dollar that goes to a low-wage worker creates $1.21 worth of economic activity, according to respected economic models. Every dollar that goes into the pockets of high-earning Americans adds just 39 cents to the national economy.
That’s why so many economists argue that raising the minimum wage is one of the best ways to boost the economy.
Maine’s early experience bolsters this argument. Raising the state’s minimum wage helped the state’s economy and the state’s low-wage workers. Reversing these benefits makes no sense.
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