PORTLAND, Maine — Voters rejected a measure to phase in a local minimum wage of $15 per hour, siding with a vocal group of local businesses who said the increase went too far, too fast.
The local Question 1 referendum campaign was seeking to raise the wages paid by individual companies and franchises employing 500 or more people in 2017, with all businesses in the city complying by 2019. The ordinance would have the wage increase indexed to inflation and exempted city workers.
The campaign came just before the city’s minimum wage increases to $10.10 per hour in January and one year before voters likely face a question of raising the statewide minimum wage to $12 per hour by 2020.
Spending in the race was lopsided in favor of the opposition group, led by the Portland Regional Chamber of Commerce. The group raised at least $130,461 through the latest campaign finance reports.
Supporters had no specific political action committee but were helped in part by the Portland Green-Independent Party, which raised a total of $5,319, which it used to support a range of city council candidates and “yes” votes on Question 1 and a zoning referendum in Question 2.
The national Patriotic Millionaires Action Fund also paid for general television ads with supposed millionaires expressing support for raising the minimum wage just before Election Day. The group did not form a local ballot committee to report spending on that ad, which did not count as an outside expenditure in the race. It did not specifically advocate a “yes” or “no” vote on Portland’s referendum question or mention the upcoming vote.
Opponents criticized the ad for coming from an out-of-state group.
Economic assumptions were central to both campaigns, which agreed with mayoral candidates that the city’s affordability is a concern.
Opponents of the increase — led by the Portland Regional Chamber of Commerce and its political action committee Too Far, Too Fast — said businesses could not support the wage hike to $15 but could deal with the upcoming increase to $10.10. The Chamber previously advocated that the city wait for state action instead of going it alone to raise the wage to $10.10.
Supporters argued that increasing the minimum wage would correct for increases in the cost of living.
The economic research in the area is thin and case studies relate so far to much larger economies than Portland’s, such as San Francisco or Santa Fe, New Mexico. Other large cities including Los Angeles, Seattle and the Bay Area city Emeryville, California, near San Francisco, have approved local minimum wages at or higher than $15 per hour.
Other cities have passed local minimum wage increases recently, meaning there are little data on the impacts.
The author of the wage ordinance, Mako Bates, and regional Chamber CEO Chris Hall debated that issue in the week before the election, disputing whether the bulk of businesses would be able to absorb the increase or would be forced to make cuts, move or just quit.
“The cost of living is higher than surrounding communities and the minimum wage needs to be higher,” Bates said during that debate, adding that he thought a local wage of $15 would be appropriate for Maine’s biggest city if the state wage rose to $12.
Case studies conducted so far have found that minimum wage increases have not decreased overall employment but have raised wages and productivity, and businesses have made up some of the added costs with price increases, according to a report done for the city of Seattle by researchers at the University of California, Berkeley.
Hall argued that those studies could not tell much about increasing the wage in Portland, which he argued could not weather an increase to $15 in the same way as other larger economies.
“The City Council has chosen a path that is responsible and sustainable,” he said, referring to the $10.10 increase taking effect in January.
Incumbent Mayor Michael Brennan and challenger Ethan Strimling, who won the city’s mayoral election Tuesday, opposed the local minimum wage hike. Challenger Tom MacMillan supported it.