The Maine Legislature is considering a proposal to dismantle the citizen-passed legislation that increases the minimum wage to $12 an hour over several years.
The bill, subject to a public hearing Wednesday, would reduce the current minimum wage from $10 an hour to $9.50 in June, reaching a maximum of $11 an hour in 2021. It would also eliminate the yearly cost of living adjustment that would have begun that same year.
The legislation was endorsed by the LePage administration. Labor Commissioner John Butera called the existing wage law a burden on businesses and seniors.
“Those who get hit the most are the tens of thousands of Mainers who are on fixed incomes,” says Butera. “That weekly trip to the market for the essentials, bread, milk and eggs. That once cost $20, it now costs $25.”
Several business owners also testified in support of the legislation. Frederick Crow, the owner of several grocery stores in Washington and Hancock counties, says when other payroll cost increases are added to the minimum wage costs, he would likely have to close a least one of his stores.
“The Woodland store, which has 14 employees, it puts the store at a negative profit and I would close that store,” says Crow. “As of next year, if the minimum wage goes to $11, more than likely I will have to close that store.”
Other business owners oppose the legislation, and say the minimum wage increases in the law are warranted and are not an impediment to economic growth. Rod Hiltz owns a café in Hallowell.
“We’ve increased our wages, we also at the same time have decreased our costs to our customers, so our prices have gone down,” says Hiltz. “And to tell how terrible this world is, we are expanding our dang business.”
The Maine Center for Economic Policy, a progressive advocacy group based in Augusta, also opposes the legislation, arguing that there is no research showing that the minimum wage increase has hurt Maine’s economy, and that there are indications the economy is growing.
“More than 400,000 Mainers supported gradually raising the minimum wage to $12 an hour because they recognized the need to pay a fair wage for a day’s work and because they knew how a strong economy protects families from poverty,” says James Myall, a policy analyst with the center.
Several business groups testified against the proposed reduction in the current minimum wage, but in support of provisions that are to slow future increases and that would allow employers to pay workers under 20 years of age a wage that is 80 percent of the adult minimum wage.
Several individuals echoed concerns that the bill seeks to undo the will of the voters at referendum, a trend that has emerged in the Legislature over the past few years.