There is a question on the ballot this fall, Question 4, that would raise the minimum wage for all workers in Maine. If Question 4 passes, Maine’s minimum wage will be among the highest in the country. Like most Mainers, I want folks in our state to make a living, support their families and live in this great state, but this goes too far too fast.
Question 4 doesn’t work for Maine
As written, Question 4 would lead to increased unemployment, raised prices and hurt seniors and others living on a fixed income. In fact, if Question 4 passes, some businesses would simply close their doors.
Question 4 imposes a 60 percent minimum wage increase over four years for most workers and a whopping 220 percent increase to tipped employees such as servers in restaurants in about a decade. Think of your budget; could you absorb that type of increase? Most restaurants on average operate with a 3 percent profit margin, and there is no ability to absorb that type of increase.
Menu prices will skyrocket
Many restaurant owners believe they will need to raise menu prices to make ends meet, with some owners estimating an increase between 25 percent to 50 percent. So if you have breakfast and your bill currently comes to $8, you can expect to pay as much as $12 in the future for that same meal. This is not some scare tactic, this is math. This isn’t just about restaurants either; think of what a 60 percent wage increase will do to most small-business owners who are struggling to make a profit.
Senior citizens will be hardest hit
While many of you may be able to absorb those increases, there is one group that won’t be getting a pay raise, senior citizens. Mainers on a fixed income have no ability to make up for the increases if Question 4 passes. For a restaurant like mine, the impact will be significant as seniors citizens are our bread and butter. Losing their business on top of higher wages will create the perfect storm for layoffs and other cut backs as we struggle to make ends meet.
Fewer jobs, less hours and benefits
Beyond the impact of higher prices and price shock for senior citizens, Question 4 will result in a number of unintended consequences. As businesses struggle to make ends meet with higher wages, they will have no choice but to look elsewhere to meet their budget. Things like free meals for employees, paid vacation days, health benefits and the number of hours on the job will all be likely targets. We will have fewer servers on the floor, and some restaurants, especially in the fast food industry, will implement automation much sooner. When you factor in these types of reductions or cuts, many employees will actually be worse off if Question 4 passes.
Let’s go back to the drawing board
Before our good name is smeared in the mud, we are the first to agree that we need to increase the state’s minimum wage, and we will be one of the first in line to support legislation to propose a more reasonable and attainable increase in our starting wages. In addition, our company is extremely protective of our employees and guests as we recognize the connection that has enabled us to be in business for 57 years. Question 4 threatens our employees, our guests on fixed incomes and our livelihood.
This is a math issue, not a political issue. I would encourage anyone to ask any server at any reputable restaurant if they would rather make $12 an hour or half the prevailing minimum wage plus tips. They will tell you they rely on tips and being their own business person to give great service in their station on every shift. Why would we want to penalize these folks, who make up 40 percent of our staff, to make less money? And why would we want to penalize folks on fixed incomes with increased menu pricing? After all, there are about 250,000 people over the age of 65 in this state, with the majority on a fixed income.
We are ready to do our part. We’ve already been doing this for years as no one in our company makes minimum wage. But Question 4 is too much too soon. We encourage Mainers to vote no on Question 4 and join us in enacting a much more reasonable approach that works for the whole state.
Randy Wadleigh is president and CEO of Governor’s Restaurants and past chair of the Maine Restaurant Association.