Op-Ed
Raising Maine's minimum wage: a step in the right direction
By Lisa Pohlmann
Maine Center for Economic Policy
Many working families across Maine just got a much-needed boost when the state increased the minimum wage to $6.75 on Oct. 1. The rate will be raised again in 2007 to $7.
We are in good company. Nearly half of the states have stopped waiting for Congress to raise the federal minimum wage, which has been stalled at $5.15 since 1997, and have been enacting their own raises over the last several years. The current highest is Washington State at $7.62.
Even at $6.75, we remain among the lowest of the other New England states: Connecticut is at $7.40 going to $7.65 next year; Massachusetts is at $6.75, going to $7.50 next year and to $8 the year after; Rhode Island is at $7.10 going to $7.40 next year; and Vermont is at $7.25, and will increase the wage annually by inflation. New Hampshire is the only New England state that has not raised its minimum wage.
Who are the minimum wage workers that will get a boost? They include about 11,000 Mainers who work in home care, hotels, retail and food preparation, to name a few. A majority of them are women.
There is a common misperception that teens make up the majority of minimum wage workers and that such "starting" wages are to be expected. However, in Maine the majority of minimum wage workers are adults who simply cannot make ends meet on $13,000 per year, particularly if they are raising children. There are also plenty of young adults from low-income families who are working hard at evening and weekend minimum wage jobs, trying to finance a college education, that deserve no less than the adults they are working beside.
Some businesses protest minimum wage increases because they fear they will drive up costs and price low-wage workers out of the labor market. However, Maine Department of Labor data show that the opposite has occurred. Between 2001 and 2005, Maine's minimum wage increased from $5.15 to $6.50. During this period, Maine's non-farm wage and salary jobs increased by 3,600. In the sectors where minimum wage jobs are most heavily represented, such as retail trade, the jobs increased by 900; the leisure and hospitality industry added 2,500 jobs during the same period. Some note that employers are able to absorb increased costs through higher productivity, lower recruitment and training costs, decreased absenteeism and increased worker morale.
Despite the growing number of people and organizations getting involved in the livable wage movement that have pressed state legislatures for these raises, we have a long way to go to ensure that all workers in this country can make enough to provide for their families. The Maine Center for Economic Policy calculates the cost of a basic needs budget that includes the cost of housing, child care and health care out-of-pocket costs. In 2004, the wage needed to cover those costs for a full time worker was $14.84 for a single parent with one child. That's more than double our new minimum wage. For a four-person family, two parents would each need to make $11.51 per hour.
Still, we are moving in the right direction. In addition to the 21 states that have raised their minimum wages above the federal level, more than 130 municipalities and college campuses have instituted livable wage requirements for contractors, and four cities have a locally enforced minimum wage. Several more states either have ballot initiatives this fall to raise their minimum wage above the federal rate or have campaigns underway to do so.
Maine should be proud of our minimum wage increases; but, in an increasingly competitive regional market, we will have to make further increases if we want to keep these workers we rely upon.
