Maine voters in 2016 backed a referendum to gradually raise the state’s minimum wage to $12 by 2020. It is now $11 an hour.
Every year since then, there have been bills in the Legislature seeking to stop or even roll back the state’s minimum wage. There also have been numerous proposals to allow lower wages for teenage workers, which have been rejected by the Legislature.
This year is no different. On Monday, the Legislature’s Labor and Health Committee held a public hearing on seven bills that would change the state’s minimum wage. One would raise the minimum wage but only for large employers. The other bills sought to lower the minimum wage, many of them seeking to do so for young workers.
As they have in the past, lawmakers should again reject these proposals because Maine’s increased minimum wage is benefiting Maine workers and lifting Maine people, especially our children, out of poverty with minimal documented negative consequences.
In 2017, 10,000 fewer Maine Maine children were living in poverty compared to the prior year. The Maine economy continued its slow recovery in 2017, but that alone cannot explain the significant drop in poverty. It was also the first year of Maine’s minimum wage increase, when the minimum wage rose from $7.50 to $9 an hour.
U.S. Department of Labor statistics show that wages grew across the board for Maine workers in 2017. Census Bureau data shows that last year’s income growth in Maine was concentrated among the lowest-paid workers. Maine’s growth among these households outpaced the nation and New England, highlighting that more than the national economic recovery was a play.
With a significant rise at the bottom of the wage scale, Maine’s average personal income grew faster than the national average last year. The average personal income of Mainers rose 3.7 percent from 2016 to 2017 to $46,455, according to statistics released in November by the U.S. Bureau of Economic Analysis.
At the same time, overall employment and the average number of hours worked also grew in Maine, dispelling warnings that the minimum wage increase would depress hiring and hours.
Given such compelling evidence, it would be counterproductive to reduce Maine’s minimum wage, which LD 425 would do.
It would also be unwise to set minimum wages based on geography, business size and the age of the workers, as other bills seek to do. LD 830, for example, would set a lower minimum wage for businesses with fewer than 50 employees, while LD 670 would raise the minimum wage for employers with more than 50 employees to $15 an hour in 2023. At the simplest level, wages are based on the type of work performed and the employee’s skill level. These things don’t vary with the size of the business or where it is located. All workers, whether they are young, work for a small business or live in a rural area, are deserving of consistent minimum wage protections.
Lawmakers heard a lot of testimony Monday about how damaging Maine’s minimum wage increase has been for businesses. They heard anecdotally about businesses closing, hiring fewer workers and raising prices. What we haven’t seen is data to back up these assertions. Studies from other states and municipalities that have substantially raised their minimum wages show there has been little if any impact on prices and jobs.
We agree with business owners that Maine’s minimum wage increase — from $7.50 in 2016 to $11 today — has been pretty rapid. But, at the same time, employers have known since 2016 what each year’s increase would be, giving them time to plan.
Overall, the data show that raising Maine’s minimum wage has helped thousands of Maine families, which in turn helps grow the state’s economy.
For this reason, there are not compelling reasons to weaken Maine’s minimum wage or to increase it for larger employers. The incremental minimum wage increases are working, and until opponents can prove otherwise with clear data, there is no need to change the law.