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Governor’s Address: The Legislature’s Coming into Special Session To Take the Easy Way Out

A year ago, House Republicans shut down state government to make sure bad policies did not pass. Now they are giving in because it’s an election year.

Augusta politicians are proving once again that they’re unwilling to make the right choices. As the session neared its end, Democrats sat on their hands, hoping voters wouldn’t notice that they avoided voting on important bills.

They didn’t vote on tax conformity or Medicaid expansion, and they didn’t vote to increase the reimbursement rates for direct-care workers who are usually paid based on the minimum wage.

Those who care for people in nursing homes or in the client’s homes are essential workers, and we don’t have enough of them. But the market should set their pay rates – not the government.

This one-size-fits-all minimum wage law is hurting small businesses, and it will hurt our economy – but most of all, it will hurt the elderly living on fixed incomes.

To keep up with the law, the state needs to increase reimbursements to non-profit healthcare agencies. So the Legislature will come back to pass an increase in the reimbursement rates.

However, this won’t resolve the ongoing pressure to raise wages. Every year, these non-profits will need more money to keep pace with the pay raises required by law.

Our businesses and our state budget will face significant challenges when the minimum wage rises to 11 and 12 dollars an hour over the next two years because of the pressure it puts on everyone’s wages.

I’ve asked the Legislature to slow down the rate of increase to the minimum wage to ensure that direct-care workers do not have their pay cut on July 1.

Three factors drive this request. First, our labor shortage. We don’t have enough people. Employers need the flexibility to pay market rates to attract workers.

Second, to address the labor shortage, I sent a bill to the legislature that would eliminate the work-permit requirement for the summer school vacation. This would allow our 14- and 15-year-olds to enter the workforce more quickly.

But Democrats tabled the bill, effectively killing it. If 30,000 teens could get to work right away, this would ease some of the pressure on wages and help our summer tourism industry.

Third, existing employees will want raises on par with increases in the minimum wage. When a new worker gets the higher minimum wage, the existing workers will expect their paychecks to go up too. Our small businesses cannot keep up this pace.

Many will have to cut back. An employer with 10 employees may now get by with six. Or the employer may close a couple hours earlier each day – or even close one day a week. As a result, workers lose jobs and pay. Progressives don’t want to admit this, but studies have already shown it to be true in Seattle.

And in Maine, employers already testified to the Legislature that they will cut hours and raise prices if the minimum wage continues to increase at this rapid pace.

A 3 percent inflation rate cannot absorb a 10 percent increases in labor costs. This is basic math.

But legislators are not interested in protecting people on fixed incomes, like the elderly, from being hurt by rapidly rising prices. They are only interested in getting re-elected.

So they will just take the easy way out – again.

Thank you.

Paul LePage

Governor

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