Increase to $11 per hour will increase low-wage Mainers’ income by more than $111 million
AUGUSTA, Maine — Workers with low wages will receive pay raises totaling more than $111 million in 2019 thanks to tomorrow’s $1 increase to the Maine’s minimum wage.
Over the course of the year, one in four Mainers is expected to receive a direct or indirect boost to their paychecks as a result of the minimum wage increasing from $10 per hour to $11 per hour on January 1.
“The voter-approved minimum wage law continues to pay dividends for Maine,” said Sarah Austin, a policy analyst at the Maine Center for Economic Policy, or MECEP. “When workers with low incomes see their paychecks increase, the benefits ripple throughout the economy. Those workers tend to spend their additional wages to cover the basics — things like food, clothing, child care or utility bills. That kind of consumer spending is good for the economy. It supports local jobs, which in turn spurs further growth.”
Thanks to a 2016 referendum approved by Maine voters, the minimum wage will increase for the third time in three years on January 1. In addition to the increase to the regular minimum wage, the minimum wage for tipped workers will increase by 50 cents, from $5 per hour to $5.50 per hour.
15.2 percent of all workers in the state — roughly 87,200 Mainers — will benefit directly from raises on January 1 as a result of the minimum wage increase, according to state wage analysis conducted by the Economic Policy Institute, or EPI. Those Mainers’ average wage increase adds up to about $1,040 in additional earnings per year. All told, these low-wage workers will take home $90.76 million more in wages in 2019.
The minimum wage increase also will bring indirect raises to other Maine workers, according to EPI.
“Over the course of the year, Maine can also expect to see nearly 56,000 additional workers benefit indirectly from this increase to the minimum wage, as employers boost pay for employees whose hourly wage was already at or just above the new $11 minimum,” said David Cooper, a senior economic analyst at EPI. “With direct and indirect raises factored, one in four Mainers will benefit from 2019’s minimum wage increase.”
Those workers expected to benefit indirectly from the minimum wage increase make up 9.8 percent of Maine’s workforce and are forecasted to take home an additional $20.3 million next year.
Prior analyses reveal the success of Maine’s minimum wage law: The increase in 2017 brought low-income Mainers the fastest wage increase in a decade and helped lift 10,000 Maine children out of poverty — the biggest single-year reduction in child poverty since current tracking began. Meanwhile, none of the referendum’s opponents’ dire predictions have come to pass: Job growth has remained steady since the law took effect and employees hours have held stable.
Maine is one of 20 states that will raise their minimum wages in 2019, and one of just six states to do so as a result of a ballot measure. MECEP endorsed and supported the 2016 minimum wage referendum.
The law will increase the minimum wage again, to $12 per hour, in January 2020. After that, the minimum wage will be indexed to inflation, providing annual cost-of-living adjustments to workers with the lowest wages in Maine.