PRESS RELEASE: Amended bill would still undermine Maine’s minimum wage law, says MECEP Executive Director Garrett Martin

Feburary 8, 2018

Mario Moretto, Communications Director
(207) 620-1101

Amended bill would still undermine Maine’s minimum wage law, says MECEP Executive Director Garrett Martin

AUGUSTA, Maine — The Maine Legislature’s Labor, Commerce, Research and Economic Development Committee voted 7-6 to reject a bill, LD 1757, that would cut Mainers wages now and in the future.

Lawmakers on the committee from both parties — including Rep. Joel Stetkis, the bill’s sponsor — rightfully rejected provisions of LD 1757 that would reduce the minimum wage and eliminate indexing, a provision that protects the purchasing power of the minimum wage with automatic adjustments to keep pace with the cost of living.

However, a six-member minority comprised of all the Republicans on the committee voted to advance a version of the bill that would establish a so-called “training wage” for workers under 18 years old, who would receive just 80 percent of the minimum wage during their first 200 hours of employment. College students on work-study would be exempted from the training wage.

MECEP Executive Director Garrett Martin released the following statement:

“A strong minimum wage protects workers from poverty and forms the foundation of a fair, thriving economy. Available data indicates Maine’s minimum wage law is improving wages without any detrimental effect on job growth. From day one, LD 1757 has been a catch-all of bad policy, founded on dubious ideas and flawed assumptions about Maine’s economy. I applaud the committee for rejecting provisions to cap the minimum wage at $11 and to eliminate indexing, which protects future generations from being undercompensated for their work. 

“However, there is no compelling reason for lawmakers to arbitrarily cut any workers’ wages, let alone to create a tiered system in which some workers — in this case young workers — receive less than equal pay for equal work. Roughly 27 percent of teenagers who would be affected by the creation of training and youth wages live in or near poverty, according to MECEP analysis. The creation of youth wages creates incentives for businesses to hire young workers on a temporary basis and replace them at the end of the ‘training’ period, thereby escaping responsibility from ever paying the full minimum wage.

“The Legislature should reject the minority report, and allow the successful minimum wage to continue working for Maine’s workers and Maine’s economy.”

BACKGROUND: In 2016, Mainers voted overwhelmingly to increase the state’s minimum wage for the first time in seven years. The voter-approved law increases the minimum wage to $12 per hour by 2020 and institutes indexing, a practice that ensures the minimum wage will increase with the cost of living in the future. The law also included a provision to eliminate the subminimum wage paid to tipped workers, but that provision was repealed by the Legislature in 2017.

Last year, roughly 103,000 Mainers received a direct pay raise because of the minimum wage law’s first increase, from $7.50 to $9 per hour. In January, Maine’s minimum wage increased to $10 per hour, leading to direct raises for roughly 59,000 low-income workers in Maine. Other workers further up the income distribution scale have also seen, and will continue to see, wage increases, thanks to the well-documented phenomena known as the “spillover effect.”

Preliminary data shows that the minimum wage increase in 2017 was far from the catastrophe predicted by its opponents. Wages increased, and not just for those at the very bottom of the economic distribution scale. Meanwhile, job growth continued unhindered by the minimum wage increase as private-sector employment continued to climb in line with previous trends.