CONTRIBUTORS

A higher minimum wage will help Maine’s elderly. A third of working seniors will get a raise.

Posted Oct. 20, 2016, at 10:43 a.m.

Gov. Paul LePage has tried to scare Maine seniors into opposing a minimum wage increase with authoritarian and false accusations. He called for the leaders of the Maine People’s Alliance, proponents of Question 4, which would increase the state’s minimum wage to $9 in January and gradually to $12 by 2020, to be jailed for what the measure would allegedly do to the elderly. In fact, Maine seniors stand to benefit from an increase.

Kathy Rondone, for example, is 72 and working for minimum wage in Augusta. She is struggling to support herself and care for her husband, who was diagnosed with Alzheimer’s disease. She was forced to give up her house because she could not afford repairs, and she is scared she may not have enough to get through. Voting yes on Question 4 would mean a better future for her.

One of the fastest-growing groups in Maine’s labor force is seniors, but many work by necessity, not choice. In the last 10 years, the percentage of Maine seniors 65 and older who work increased by nearly 50 percent. Today, about 31,000 Maine seniors 65 and older work. Raising the minimum wage to $12 would raise wages for more than 1 in 3 working seniors. Poverty rates for seniors also are high. Between 2009 and 2013, more than 1 in 10 Maine seniors over age 55 lived below the poverty line, and if it weren’t for Social Security income, more than half would be poor.

Opponents of Question 4 might argue that raising the state’s minimum wage will hurt low-wage workers by raising prices, but the economic research tells us that is simply not the case. Economists at the University of California estimate that increasing Maine’s minimum wage to $12 by 2020 would raise overall prices by less than 1 percent over the next four years. This is far less than the nation’s overall inflation, so higher wages would allow Maine seniors employed in low-wage jobs to better afford the basics.

In addition, the Maine Center for Economic Policy found that a $12 minimum wage by 2020 could increase wages for nearly one-third of the Maine workforce without harmful impacts on employment and businesses. Their report considers research on the positive effect that raising the minimum wage can have on employee productivity, studies showing that a higher minimum wage can reduce turnover costs for businesses and evidence that workers receiving raises are likely to spend their additional income in the local economy.

A $12 minimum wage also would be an investment in future generations of Maine seniors. Social Security benefits are determined by employment earnings over a lifetime. A higher minimum wage that directly increases workers’ earnings will boost the Social Security benefits of future seniors. A higher minimum wage also could help Mainers save for retirement. This has become more important as employers shift away from pension plans to 401(k) plans that require workers to contribute to their retirement savings from their earnings.

As things stand today, falling wages along with rising housing, higher education and health care costs prevent most workers from saving enough for retirement. The Economic Policy Institute estimates that only 1 in 10 families at the bottom fifth of the income ladder had retirement account savings in 2013, compared with nearly 9 in 10 families in the top fifth.

Ultimately, we cannot ignore the fact that thousands of Maine’s seniors cannot afford to retire at age 65 and have become a fast-growing part of our low-wage labor force. We must ensure that our seniors can afford to live and retire with dignity, and Question 4 offers Mainers an opportunity to chart a better course for Maine seniors and the state’s economy.

Diane Grandmaison is a member at-large of the executive board of the Maine Alliance for Retired Americans. Laura Huizar is a staff attorney at the National Employment Law Project.

 

SEE COMMENTS →