Restoring the value of work: The case for the $12 minimum wage

September 16, 2016

Raising the minimum wage to $12 is an important step toward an economy that works for everyone, where all workers receive a fair wage for an honest day’s work and where the promise of the middle class is achievable for all Mainers who work hard.

 

AUGUSTA — This November, Maine voters will consider Question 4, an initiative to raise the state’s minimum wage incrementally from the current $7.50 to $12 an hour by 2020. Recent Maine Center for Economic Policy research and analysis found that a $12 minimum wage would lift wages for one in three working Mainers, putting economic security more in reach for tens of thousands of Mainers and their families and creating an economy that works better for everyone.

by Sarah Austin, Portland Press Herald, September 16, 2016

We all benefit when Mainers’ jobs pay enough to support them and their families, to pay off their debts and to save for college, unexpected expenses and a secure retirement. Right now, too many Maine workers struggle just to pay the rent, buy shoes for their kids and keep warm in the winter because their jobs don’t pay enough to make ends meet.

A Mainer working a year-round, full-time job at the current $7.50 minimum wage earns just $15,600 – less than the federal poverty level for a family of two. Adjusted for inflation, Maine’s minimum wage today has less purchasing power than it did in 1968. By 2020, passage of Question 4 will increase wages for 181,000 Maine workers – that’s one in three of all Maine workers – by an average of $3,485 a year.

We all benefit when Mainers’ jobs pay enough for them to afford health care and reliable child care that will make them more productive and dependable workers. When Mainers’ jobs pay enough for them to invest in higher education and earn higher incomes over their lifetimes, it will increase demand for goods and ultimately help to grow our economy. Right now in Maine, too many working Mainers struggle to put gas in their car, let alone afford the college or other specialized training they need to get a better job.

We all benefit when Maine workers’ jobs pay enough to lift them out of poverty and reduce the need for public assistance. The $12 minimum wage will raise pay for the 64 percent of Maine workers (nearly two out of three) who live in households with poverty-level incomes and the 60 percent of Maine workers who live in households with near poverty-level incomes.

Currently, nearly a quarter of all working Mainers receive Supplemental Nutrition Assistance (formerly food stamps) and other public assistance. Increasing the minimum wage to $12 will reduce public assistance by 6.9 percent, allowing the state to target limited resources toward transitioning more part-timers into full-time work, providing more for services to Mainers who are unable to work and saving taxpayer funds.

We all benefit when Mainers’ jobs pay enough for them to prepare for a secure, dignified retirement. Wage income accounts for nearly 60 percent of seniors’ income in Maine. One in three Mainers age 65 or older who work will get a raise when we increase the minimum wage to $12. Workers who get a raise, especially women, whose lifetime earnings lag those of men, will have more income to save for retirement and increase their lifetime earnings-based Social Security benefits.

We all benefit when Maine kids get a healthy, nurturing start in life. One out of four Maine workers who will get a raise supports at least one child.

Research shows that a $3,000 increase in household income for families currently earning less than $25,000 a year will increase the lifetime earnings for a child in the home age 5 or under by 17 percent. Such a boost in earnings for families with young children will dramatically improve the future prospects for generations of Mainers to come.

Passing Question 4 will help to restore the value of work for tens of thousands of Mainers. It will increase wages for one-third of Maine’s workforce, improving economic security for them and their families. It will make sure that more Maine kids have a healthy, nurturing childhood and grow up to realize their full potential.

Raising the minimum wage to $12 is an important step toward an economy that works for everyone, where all workers receive a fair wage for an honest day’s work and where the promise of the middle class is achievable for all Mainers who work hard.

Sarah Austin is a policy analyst with the Augusta-based Maine Center for Economic Policy and primary author of the new report “Restoring the Value of Work,” which is available on the organization’s website.