Testimony on LD 192 – An Act to Index the State Minimum Wage to Inflation

This bill will put more money in the pockets of working Mainers and, by doing so, ultimately supports greater economic activity and prosperity for all.

Maine workers want to work.  Despite their best efforts, low- and middle-income workers continue to lose ground.  While median household income in Maine grew at a faster rate than in the U.S. or New England during the most recent business cycle, real wages for low- and middle-income Maine households remained stagnant or declined.

In periods of economic uncertainty, it is vitally important that we do all we can to preserve economic security and economic opportunities for Maine workers.  Making work pay is not only the right thing to do, it makes sound economic sense as well.  A minimum wage that keeps pace with the increasing cost of living provides greater long-term stability for families and for the overall economy.  Indeed, one need look no further than the recent recession to understand the negative impacts that reduced consumption, prompted by real or perceived economic insecurity, at the household level can have on the broader economy.

Ten states – Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Washington – have already made this connection and have indexed minimum wage levels to inflation.  In addition to these, eight states including Connecticut and Massachusetts, have minimum wage levels that are greater than or equal to Maine’s.  Historical evidence and analyses of employment patterns in states with higher minimum wages reveal no adverse relationship between minimum wage laws, employment, or business development.  In a few instances there is a well-documented positive correlation between increases in the minimum wage and employment.

I began today’s testimony referring to the plight of Maine workers, 34% of whom are employed in industry sectors that tend to pay at or slightly above the minimum wage.  These sectors include leisure and hospitality services, health care and social assistance, and retail trades.  While the state has limited capacity beyond legal or regulatory means to impact the broader economy, we are all aware of the degree to which decisions made in the State House impact low- and moderate-income families.  For the approximately 200,000 workers employed in the industry sectors identified above, this proposal offers the potential for greater economic security and improved quality of life.  It will also encourage greater economic activity at a critical point in the recovery process.  As a result, indexing the minimum wage is a win-win-win for Maine workers and families, Maine businesses and for the Maine economy.

Accordingly, MECEP strongly supports LD 192 and urges its quick passage.

Garrett Martin, MECEP’s Associate Director testifying before the Joint Standing Committee on Labor in support of LD 192, An Act to Index the State Minimum Wage to Inflation.