MHPC paints only in broad strokes and relies on irresponsible generalizations to advance their cause.  Case in point, MHPC never clarifies exactly which programs it is talking about when discussing the need to fix Maine’s “welfare system.”  As a result, they extend their critique of one program in particular – Temporary Assistance to Needy Families – to the system as a whole. 

 The TANF program constitutes approximately 1% of the state’s budget and serves about 14,200 families.  This is hardly the source of our budget woes nor could it possibly “trap” a large population as MHPC suggests.  In fact, one of the report’s authors, Tarren Bragdon, helped pass the TANF legislation as a Republican in 1997, which has changed little since then.

 Lumping spending on health care through the state’s Medicaid program, MaineCare, leads to the claim that “Maine spends $2.506 billion on welfare.”  It ignores the key fact that much of this money comes from federal sources which actually helps Maine take care of its most vulnerable citizens and provides significant economic benefit to the state.

 Suggesting that Maine is somehow out-of-step in its design of MaineCare is similarly misleading.  82% of MaineCare’s budget reimburses healthcare providers for services to children, the elderly, and people with disabilities.  These are populations served in accordance with mostly federal, not state, guidelines.  To suggest that Maine is “trapping” these people in a state of dependency is troubling to say the least.

 Where Maine has exercised discretion in the implementation of MaineCare, it has been done with bipartisan support and with very specific outcomes in mind.  Expanding eligibility to parents and childless adults has helped Maine achieve some of the highest rates of health insurance coverage in the country at a cost that is less than what it otherwise would have been.  Extending drug benefits to seniors has allowed the state to reduce the cost of prescription drugs at significant savings.  MHPC’s insistence on benchmarking Maine’s enrollment levels in MaineCare to other states obscures these facts and fails to acknowledge demographic differences between states as well.

 Re-evaluating and strengthening Maine’s safety net to help individuals and families in a changing economy is an important task.  Maximizing the return on our investment in these programs requires us to recognize their inherent complexities and differences rather than demonizing programs and people for political convenience.

Bill opponents label it a “job killer” that would undermine business development.  One group actually suggested that past minimum wage increases “may not have been as much as desired (for workers), or even deserved.”

Such “falling sky” rhetoric is unfounded and demonstrates not so thinly veiled contempt for low-wage workers.  Maine’s minimum wage has been adjusted approximately three out of every five years since its introduction in 1959 and consequently has kept pace, more or less, with inflation.  A chart MECEP provided legislators details this history and the impact indexing would have had in terms of maintaining buying power for minimum wage workers.

MECEP’s analysis finds that increasing Maine’s minimum wage did not cost jobs or reduce economic activity.  This experience is mirrored elsewhere.  States that raised their minimum wage above the federal minimum between 1997 and 2007 actually enjoyed lower unemployment rates than states that did.  With regard to economic activity, the Federal Reserve Bank of Chicago concluded that “an increase in the minimum wage boosts consumer spending substantially more than tax cuts.”

From the standpoint of governmental efficiency and predictability of labor costs for businesses, indexing the minimum wage makes perfect sense.  Rather than arguing annually over whether and how to raise the minimum wage (indeed better solutions are available), we should concern ourselves with creating an economic environment in which the wages of low- and middle-income workers keep pace with overall economic activity and foster greater prosperity.  In the most recent business cycle, working family incomes remained stagnant or declined despite continuing productivity gains.  Indexing the minimum wage will clearly benefit Maine workers and their families, Maine businesses and the Maine economy.

Author’s note: On February 22, the Labor Committee tabled LD 192 and will vote on it at a future work session. Stay tuned for further updates.