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Governor’s Address: Let’s Ensure Maine’s Minimum Wage Law Does No Harm

We need to make sure that employees in Maine do not see the same cut in pay that’s happening to low-wage workers in Seattle.

The Department of Labor submitted a bill this year to establish a training wage and slow the increase of the minimum wage. It would also eliminate indexing once the wage rises to $12 an hour in 2020.

There’s a big difference in the cost of living in Aroostook and Cumberland Counties. One wage doesn’t fit all employers. Other states recognize that a statewide minimum wage poses a problem. New York State allows its Commissioner of Labor to set the wage for counties outside New York City and its three surrounding counties.

In 2019, Maine’s minimum wage will be the same as that of Massachusetts – and in 2020 it will be higher. Think about that.

Maine’s minimum wage will hurt the ability of our young people to get their first job. More than 26 states have a training wage or allow the use of the federal training wage. Maine does not.

Work is so important for young people. A job teaches them to develop good work habits, to be accountable to others, and to understand consequences, like what happens when someone doesn’t show up on time.

Maine should have a training wage for these young workers, and we need to gradually raise the minimum to $12.

Economists have published studies indicating that increases in the minimum wage affect employment over time. They’ve predicted Maine will lose 9,000 jobs through 2020 due to the increase of the minimum wage to $12 – and a loss of 28,000 jobs by 2023.

They estimate each of these jobs lost would have paid $9,700 in wages.

Economists who studied Seattle’s minimum wage increase have seen that workers’ take-home pay has decreased.

The first increase in the minimum wage did not show much effect, most likely due to Seattle’s strong job market. But the second wage increase to $13 resulted in reducing the hours worked in low-wage jobs by around 9 percent.

Folks, when your hours are cut, you earn less, not more. These workers in Seattle lost an average of $125 a month in 2016, despite the hike in the minimum wage.

Don’t listen to union bosses. They like increases in the minimum wage because union wages go up when the minimum wage goes up. Unions are not concerned with the few people who actually make minimum wage in Maine.

In 2016, only about 6,000 out of the 700,000 Maine workers were earning the minimum wage, and most were young or worked part-time.

Our employers were already paying more than the minimum wage, so the increase to $9 and $10 an hour had little impact. But, just as in Seattle, going to $11 next year and then $12 in 2020 will have drastic consequences.

We are the oldest state in the nation and need to care for our seniors. These minimum wage increases hit our nursing homes and providers who care for people with intellectual or developmental disabilities hard.

The mandated wage hike for entry-level workers also has increased costs of experienced employees who naturally expect a corresponding raise in their pay. Nursing-home budgets cannot keep pace and many are facing closing for good.

We need to slow the increase to $12. We can get there, but getting there by 2020 is too fast.

Thank you.

Paul LePage

Governor

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