Measures to raise Maine's minimum wage

Lawmakers on March 23rd held public hearings in Augusta on eight separate proposed bills related to raising the minimum wage. During the last legislative session, Governor Paul LePage vetoed all minimum-wage bills.

“We need to raise wages across the board. All throughout Maine, working families are living paycheck to paycheck and struggling to make ends meet. Workers’ wages are simply not keeping pace with rising costs. Raising the minimum wage is a first step in a larger effort to build an economy that works for everyone, not just the wealthy few,” stated Maine AFL-CIO Executive Director Matt Schlobohm.

Many small-business owners testified in favor of a wage increase.

“I’ve started, owned, and invested in several small businesses in Maine over the years, and I would like to let you know that many small business owners want to see a raise to the minimum wage,” said Stephen Gottlieb of the Maine Small Business Coalition. “When healthcare workers, waitresses, or janitors are paid more, they will spend that money in the community—creating more jobs and more small businesses. In this way, with this tide, all the boats rise together.”

The American economic social contract used to ensure someone who worked full time was able to at least make ends meet. Without indexing, wages have not kept up to cost of living increases, which has steadily eroded the social contract.

“Maine workers find themselves working at least full time but still living in or near poverty, while having to care for their families at the same time,” said Rep. Gina Melaragno, D-Auburn, who submitted An Act to Raise the Minimum Wage and Index It to the National Average Wage. “They have seen the prices of everything go up except the price of their undervalued labor, and they are tired of being thrown a small token raise every five or six years. They want meaningful, lasting change.”

Republican lawmakers blocked all of the proposed minimum wage bills.

On June 2, 2014, the City Council of Seattle, Washington, passed a local ordinance to increase the minimum wage of the city to $15 an hour. As of 2015, Los Angeles, San Francisco, Chicago, and Oakland, California, have approved increases.

  • In all, twenty-two cities nationally have created their own minimum wage, according to the National Employment Law Project.
  • A 2014 Center for Economic and Policy Research study found that job creation is faster within states that raised their minimum wage. In 2014, Washington State, with the highest minimum wage in the nation, exceeded the national average for job growth.
  • The CEPR showed high reductions in labor turnover and vast improvements in organizational efficiency occurred when the minimum wage was increased.
  • The nonpartisan Economic Policy Institute projects that if the minimum wage rises from $8 to $9, everyone currently earning $9 would be bumped up to $10, as employers adjust their pay scales.
  • Researchers from the University of California Berkeley’s Institute for Labor Relations Research found that after San Francisco and Santa Fe increased the minimum wage unemployment and prices remained unchanged—despite wages falling and unemployment going up in surrounding counties.
  • The Economist, wrote, “A minimum wage, providing it is not set too high, could thus boost pay with no ill effects on jobs.”

There are various proposals to increase the minimum wage in Maine cities.

Bangor- photo by Ramona du Houx

Last February Bangor City Councilor Joe Baldacci proposed a local ordinance that would incrementally increase the minimum wage in the city, beginning with a bump to $8.25 per hour in 2016, advancing to $9 per hour in 2017, and going to $9.75 in 2018.

“Family incomes in Maine and across the country have been stagnant for too long. We need to focus on and promote policies that will help raise people’s incomes. Raising the minimum wage is a critical piece of that effort,” said City Councilor Joe Baldacci.

This spring he hosted a minimum wage forum at Abraham Lincoln School, followed by appearances in Machias and Belfast, where he discussed the issue with citizens. Currently Baldacci is scheduling spaghetti dinners, where he will continue the discussion throughout the Second District.

“The people who work at minimum wage or near minimum wage, they are not asking for a handout,” said Baldacci. “There is no better issue that says that we want to reward work over welfare than raising the minimum wage.”

Over 100 attended his forum in Bangor, where he invited a guest panel who spoke on raising the minimum wage. They included: Danato Tramuto, founder and CEO of Physicians Interactive; Jim Wellehan, owner of Lamey-Wellahan shoes; Jane Searles of the Maine Center for Women, Work and Community; Christy Daggett of the Maine Center for Economic Policy; and former Governor John Baldacci.

A detailed 2014 study in California showed that raising the minimum wage has numerous public health benefits, not the least of which is more access to health care. Tramuto pointed out that the health and wellbeing of the families of minimum-wage earners is at risk.

Melissa Connors, a full-time, college educated, minimum-wage worker who attended the forum said, “This coat that I am wearing tonight was a Christmas present, because I didn’t have money to be able to buy a decent coat. Nobody thinks two dollars and hour is going to make a difference, but it does.”

Panelist Todd Gabe, an economics professor at the University of Maine, said if the minimum wage increased from $7.50 to $9.75 per hour, 18 percent of workers in the Bangor metropolitan statistical area would be directly affected.

There would also be a positive ripple effect for Bangor’s economy, according to Councilor Joe Baldacci.

“It bumps up the wage structure,” said Baldacci. “An increase of just a dollar an hour would give working people $2,000 more per year. That would in turn be spent locally. People who make the minimum wage or near it are struggling to get by. They spend every penny they make in their local communities. Those extra dollars will help create other jobs and opportunities, as well as improve the heath of their families. It’s not only the right thing to do, but it’s also very good economics.”

With most of the economic recovery since the recession benefiting the highest wage earners, people earning a minimum wage have been drastically left behind, according to the Maine Center for Economic Policy (MCEP).

“The problem with the economy both at the state and the national level is not that American businesses are making insufficient profits,” said Christy Daggett of MCEP. “It’s that wages have stagnated for the median wage earners since the 1980s, and for the lowest wage earners in Maine have actually fallen behind.”

The Portland Green Independent Committee is currently collecting signatures for a citywide referendum in November to establish a mandatory livable wage of $15 an hour for the city.

After a year of debate on the issue, during which lobbyists from the Portland Chamber of Commerce, the Maine Innkeepers Association and the Maine Restaurant Association tried to prevent a substantial wage increase, eliminate indexing, exclude young workers, and gut enforcement provisions, the city council decided.

On July 5th, going against the city’s finance committee, the Portland City Council voted to create a minimum wage of $10.10 an hour that starts on January 1, 2016. The wage will rise to $10.68 an hour in 2017. A year later it will increase on July 1 at the same rate as the Consumer Price Index. The city council is widely expected to place the question on the November ballot.

Augusta City Councilor and former State Representative Anna Blodgett has proposed a minimum wage of $8.25 an hour with exceptions for small businesses with four or fewer employees and for restaurants.

And South Portland’s City Council has agreed the minimum wage must be raised.

While communities across the state are weighing the possibility of increasing wages, LePage tried to prevent cities and towns from enacting their own minimum wages. Last April he proposed a failed two-sentence bill, sponsored by Assistant Senate Majority Leader Andre Cushing, that read: “The State intends to occupy and preempt the entire field of legislation concerning the regulation of the minimum wage. Any existing or future order, ordinance, rule or regulation of any political subdivision of the state is void.”

 “We have a tradition of local control in the state of Maine that is enshrined in our heritage—they tried to overturn that. We’re trying to raise people’s wages,” said City Councilor Baldacci.

The Maine People’s Alliance (MPA) is gathering signatures for a 2016 referendum that would create a statewide minimum wage of $12 an hour by 2020.

“I work full time and still struggle to make ends meet. Families like mine work hard and deserve to be paid a fair wage. That means more than our current minimum wage of just $300 per week. No family can live on that,” said Katie McDaniel, a mother and convenience store worker from Auburn, who came for a training to collect signatures for the MPA petition drive. “I’m really excited to be a part of this campaign to make sure that all families have a chance to succeed.”

The MPA’s Mainers for Fair Wages citizens’ initiative would raise Maine’s minimum wage to $9 in 2017 and then by $1 a year until it reaches $12 by 2020. After that it would increase at the same rate as the cost of living. The initiative would also incrementally raise the tipped minimum wage, until it matches the minimum wage for all other workers by 2024.

The federal government requires a wage of at least $2.13 per hour be paid to employees that receive at least $30 per month in tips. If wages and tips do not equal the federal minimum wage of $7.25 per hour during any pay period, the employer is required to increase cash wages to compensate.

Currently, Maine’s tipped minimum wage is $3.75 per hour.

“When workers are paid more, they spend more money in their local economies. That helps the whole community, and all businesses do so much better,” said Joe Kubetz, who owns J. K. Landscaping Design in Portland. The EPI estimates that gradually increasing the wage to $12 per hour would give over 120,000 Maine workers—more than a fifth of the state’s workforce—a raise.