The Maine Heritage Policy Center released a report Wednesday that says a ballot measure that would raise the minimum wage in Maine would eliminate jobs and drive up the cost of goods and services.
The Policy Center is joined in its opposition by some Maine businesses that don’t support a statewide mandate, despite the fact that they already pay above the minimum wage.
One of those businesses is Sterling Rope out of Biddeford. CEO Carolyn Brodsky says she already pays above the current minimum wage of $7.50 an hour in order to attract employees. But if voters approve a statewide $12 an hour minimum wage, she says, it will have a ripple effect on all of her employee wages.
“If somebody’s been working for me, they started out of high school, they’ve been working for me for a couple years, and they’re at $14, $15 an hour, and now someone’s going to come in with no experience at $12 an hour, it’s gonna push all the wages upward,” she says.
Higher wages will also spill over into other expenses, says Richard Snow of Maine Indoor Karting in Scarborough. Snow says he pays above minimum wage, but many people don’t realize paying a worker $10 an hour costs more like $16.
“With every payroll increase, we have to pay higher unemployment taxes, higher worker’s comp taxes, social security and Medicare, all the benefits side that the employer pays, it will increase our cost,” he says.
These are all unintended consequences of raising the minimum wage, according to the Maine Heritage Policy Center. At a press conference in Augusta, CEO Matt Gagnon unveiled a report on the effect of raising the minimum wage to $12 an hour by 2020.
“There are poor people in the state. This is a very impoverished state. Something has to be done about that. The question is whether the minimum wage is the way to solve that,” he says.
According to the Maine Heritage Policy Center’s report, the answer is no. Analyst Liam Sigaud says raising the minimum wage could eliminate 14,000 jobs. And, he argues, the minimum wage does not target the poor.
“Most minimum wage workers are teenagers living with their parents, second or third earners in households, or students working part time,” he says.
But Garrett Martin of the Maine Center for Economic Policy says that’s only looking at those who make the minimum wage, not all the employees who earn between $7.50 an hour and the proposed increase to $12 an hour.
“Based on the analysis and research we’ve done, again, this will benefit 1 in 3 workers. Ninety percent of those are over the age of 20,” he says.
Raising the minimum wage, Martin says, will have little to no negative effect on jobs for low-wage earners. He cites a letter that more than 600 economists penned to Congress in 2014 that made that argument in support of a federal minimum wage boost.
As for businesses, Martin says employers find a variety of ways to adapt.
