Restoring the Value of Work (executive summary)

August 17, 2016

low-income-chart1This November, Maine voters will consider a ballot initiative to raise the state minimum wage incrementally to $12 an hour by 2020 and gradually increase the subminimum wage for tipped workers until it equals the minimum wage for non-tipped workers by 2026. After 2020, the minimum wage will increase annually by the rate of inflation.

1 in 3 Maine Workers Will Get a Raise

By 2020, 181,000 Maine workers will receive a wage increase and can expect approximately $3,485 more in annual earnings. This includes tipped workers, who will reach the $12 minimum wage by 2026. It also includes workers who make slightly higher than the new minimum wage as employers adjust pay ladders to maintain competitive wage structures. In total, 32.8 percent of Maine workers will receive a raise.

Raising the Minimum Wage Will Boost Maine’s Economy

Maine workers whose pay rises because of the minimum wage increase will cumulatively earn $630 million more a year. These are the same households most likely to spend their additional earnings in the local economy, increasing demand for goods and services and increasing sales for local businesses.

Raising the Minimum Wage Will Improve Productivity and Offsets Increased Labor Costs

Higher wages increase worker performance, morale, health, and customer service and reduce employee absenteeism and worker grievances. These lead to higher productivity, increased workplace efficiency, greater customer satisfaction, and lower operational and labor costs. This improved productivity offsets increased minimum wage costs and as a result Maine is unlikely to experience a net loss of jobs from the minimum wage increase.

Raising the Minimum Wage Will Be Transformative for Maine Children

Research shows that a $3,000 increase in income for households earning less than $25,000 a year with a child in the home age five or under results in a 17 percent increase in that child’s lifetime earnings on average. By boosting the earnings of families with young children, raising the minimum wage will have a transformative effect on future generations of Mainers.

Raising the Minimum Wage Will Reduce Need for Public Assistance

Raising the minimum wage decreases the proportion of working Mainers who receiving public assistance by 6.9 percentage points. This will allow the state to target limited resources toward transitioning more Mainers into full-time work, better serving Mainers and their families who are unable to work, and saving taxpayer funds.

PDF of the study executive summary: Restoring the Value of Work (executive summary)

PDFof the full study: Restoring the Value of Work (full report)

Here is the executive summary of MECEP’s full analysis.

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