Lawmakers are considering a bill to cut the minimum wage. Here’s why they should oppose it.

January 24, 2018 by

James Myall

According to a recent MECEP analysis, the recent voter-approved minimum wage law is working. Workers’ paychecks are growing, and job growth continues at a steady clip.

Nonetheless, lawmakers are once again considering a proposal to undermine the successful minimum wage law. The most recent threat is LD 1757, a bill sponsored by Rep. Joel Stetkis, R-Canaan, that would cut the minimum wage and undermine the will of the voters.

LD 1757 would inflict real economic harm on Maine families, and lawmakers should reject it.

The minimum wage law is a success

A strong minimum wage protects families from poverty and forms the foundation of a fair, thriving economy. That’s why, in 2016, Mainers overwhelmingly voted to increase the state’s minimum wage for the first time in seven years. The voter-approved law increases the minimum wage to $12 an hour by 2020 and institutes indexing, a practice that ensure the minimum wage will increase with the cost of living in the future. (The law also included a provision to eliminate the subminimum wage paid to tipped workers, but that provision was repealed by lawmakers in 2017.)

Last year, roughly 103,000 Mainers got a direct pay raise because of the minimum wage law’s first increase, from $7.50 to $9 per hour. In January, Maine’s minimum wage increased to $10 per hour, leading to direct raises for roughly 59,000 low-income workers in Maine. Other workers further up the income distribution scale also saw wage increases, thanks to the well-documented phenomena known as the “spillover effect.”

Preliminary data shows that the minimum wage increase in 2017 was far from the catastrophe predicted by its opponents. Wages increased, and not just for those at the very bottom of the economic distribution scale. Meanwhile, job growth continued unhindered by the minimum wage increase as private-sector employment continued to climb in line with previous trends.

How would LD 1757 undermine Maine’s minimum wage law?

LD 1757 would roll back the success of Maine’s minimum wage in four ways:

  • It would cut the minimum wage to $9.50 per hour in June of this year.
  • It would cut future increases in half and cap the total increase at $11 per hour.
  • It would eliminate future cost-of-living adjustments to the minimum wage (also known as “indexing”).
  • It would create a new subminimum wage for workers under 18 years old and for workers under 20 years old in the first three months on the job.

The first two provisions should be easily defeated on the merits: At a time when all available data indicates that Maine’s minimum wage law is improving wages without any detrimental effect on job growth, there is no compelling reason for lawmakers to cut Mainers’ wages. The other provisions are at best based on false premises. At worst, they represent a cynical attempt to undermine the power of Maine’s minimum wage.

Indexing protects future workers from poverty wages

According to The Pew Research Center, the purchasing power of the federal minimum wage peaked in 1968 and has been in alternating periods of stagnation or decline ever since. In other words: Despite several rounds of increases, the federal minimum wage today does not guarantee the same standard of living that it did a half-century ago.

Indexing is a solution to that stagnation. By automatically adjusting the minimum wage to reflect the real cost of living, Mainers are guaranteeing that future generations will earn enough to see their basic needs met.

The fall in the minimum wage’s purchasing power was caused, in part, by a failure of elected officials to ensure this economic protection kept up with the times. Indexing guarantees that protection, regardless of the political winds in Augusta and Washington, D.C.

Subminimum wages for young workers are wrong

The creation of subminimum wages for young workers and new employees violates the basic premise of the minimum wage: That society has an interest in setting an absolute wage floor, below which no worker should fall.

The idea that young Mainers don’t deserve or require the same living wage as adults is wrong. Roughly 17,000 Mainers under the age of 20 would be affected by this legislation – that’s two thirds of all workers in that age group, according to a MECEP analysis of US Census data. Cutting the wages of these workers by 20 percent would have a dramatic effect on their personal and family finances.

One in four teens (27 percent) who would be affected by this legislation is living in or near poverty. Those thousands of young workers depend on their paychecks for their own economic security and contribute to their families’ wellbeing. Every dollar in their paycheck matters.

The notion that workers under 20 years old could be paid less during the first 90 days of their employment creates an incentive for employers to treat their workers as disposable assets, not human beings. Especially in Maine’s highly seasonal industries, this 90-day training wage would encourage businesses to hire workers on a temporary basis at the lower wage, let them go at the end of that period, and simply rehire at the start of the next season at the same low training wage.

Lawmakers must also consider the moral questions that such proposals raise. Should Maine be in the business of deciding that some workers should earn less money than others for reasons that are beyond their control? A young Mainer can no more control their age than can change the color of their skin.

Tell your legislators: Hands off our minimum wage law

The people of Maine have made their voice clear. Rolling back Maine’s minimum wage law, or undermining it with a training wage, would jeopardize the state’s progress toward creating an economy that works for everyone. It would cause undue economic harm to tens of thousands of low-wage workers who are already our most vulnerable friends and neighbors.

Tell your state representative and state senator: The minimum wage law is working. Vote “No” on LD 1757.

One Response to “Lawmakers are considering a bill to cut the minimum wage. Here’s why they should oppose it.”
  1. […] who would be affected by the creation of training and youth wages live in or near poverty, according to MECEP analysis. The creation of youth wages creates incentives for businesses to hire young workers on a temporary […]

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