MECEP supports passage of both of these bills because it is critically important for policymakers to implement policies that preserve economic security and opportunities for Maine workers, especially in periods of distressed economic activity. LD 447 and LD 457 represent two reasonable steps that policymakers can take to enhance achieving these outcomes. By modestly raising the minimum wage and indexing it to inflation, these bills help working families tackle the increasing costs of living, in turn providing long-term stability for Maine’s working families and the state’s overall economy.
As the Great Recession has unfortunately demonstrated, reduced consumption at the household level has significant negative impacts on the whole economy. Decreased spending indicates decreased demand, which makes it difficult for local businesses to maintain, let alone grow, their business.
Conversely, increased consumption helps fuel economic recovery. One cost effective way to increase consumption is to increase incomes for working families, who will spend their money in the local economy to purchase food, clothing, medicine, housing, and other items of necessity. This increased demand supports small businesses, helping them retain and eventually grow their workforces.
Increasing income for working families through a higher minimum wage would have a stimulative effect now and in the future through gains in consumption. Historical evidence and numerous analyses demonstrate that states with higher minimum wages do not experience diminished economic development or employment levels as a result of the higher minimum wage.
In distressed economic times like these, policymakers should raise the minimum wage and index it to inflation. Doing so will ensure that working families’ earnings can better keep pace with the rising costs of living, help businesses see increased demand for their products, and stabilize the economy. Accordingly, MECEP urges this Committee to support these two bills.
Garrett Martin, MECEP Associate Director, testifying in front of the Joint Standing Committee on Labor, Commerce, Research and Economic Development in favor of LD. 447 and L.D. 457, Proposals Regarding Maine’s Minimum Wage.