Maine’s average personal income grew faster than the national average last year. Gov. Paul LePage is touting this as evidence that his economic policies are working. However, he leaves out one crucial aspect of this good news — the increase in Maine’s minimum wage, which he opposes, but was passed by voters in 2016.
The state’s minimum wage rose from $7.50 to $9 an hour after Maine voters approved a referendum to raise it. The minimum wage increased to $10 an hour this year. It will rise to $11 an hour next year and $12 in 2020. After that, it will be adjusted for regional cost-of-living increases.
With a significant rise at the bottom of the wage scale, the average personal income of Mainers rose 3.7 percent from 2016 to 2017 to $46,455, according to statistics released last week by the U.S. Bureau of Economic Analysis.
Nationally, the average income rose 3.6 percent to $51,640 from 2016 to 2017.
Recent U.S. Department of Labor statistics that show wages grew across the board for Maine workers in 2017, the first year of the $1 minimum wage increase. But, as expected, the largest gain was among the lowest-paid workers, who saw the largest increase in earnings — about 10 percent — in the more than 15 years that the department has tracked this state-level data.
Census Bureau data shows that last year’s income growth in Maine was concentrated among the lowest paid workers, which was unique to the Pine Tree state. Maine’s growth among these households outpaced the nation and New England, highlighting that more than the national economic recovery was a play.
Income for the poorest Mainers rose much faster for these workers than for any other group. Compared with 2016, household incomes for the bottom quarter of Maine workers were 10 percent higher in 2017, even after adjusting for inflation, according to analysis from the Maine Center for Economic Policy, a left-leaning group. The data also show shrinkage of the percentage of Maine households at the lowest income levels as households advanced up the income ladder. For example, in 2016, nearly 23 percent of Maine households earned less than the poverty level. In 2017, 21 percent of households were in this bracket. The 2017 federal poverty level was $24,600 for a family of four.
The benefits of increasing the minimum wage spread beyond rising incomes. Maine has also seen a marked drop in childhood poverty. The number of Maine children living in poverty declined sharply last year. In 2017, 33,000 Maine children — or 13 percent — were living in a household that earned less than the poverty level. In 2016, 44,300 children, about 17 percent — lived below the poverty level. Poverty rates dropped for Maine adults as well, but the decrease was not as large.
Since the referendum was passed, Republican lawmakers tried to shrink and slow minimum wage increases. They were joined by LePage.
If they had been successful, the income growth numbers that the governor now takes credit for would have been muted, and more Maine children would have remained in poverty.