Automatic minimum wage hikes proposed
1/29/09 | 16 comments

Automatic minimum wage hikes proposed


By Mal Leary
Capitol News Service

AUGUST, Maine — In a move denounced by the business community, Maine’s minimum wage would go up every year based on the increase in the consumer price index under a measure now before lawmakers.

“There have been a number of states in the country that have done this,” said Rep. John Tuttle, D-Sanford, House chairman of the Legislature’s Labor Committee and sponsor of the bill. “This is a more efficient method of addressing the need of a minimum wage, particularly given difficult economic times.”

He said several constituents had approached him about sponsoring an increase in the minimum wage, both through tying it to the consumer price index and through a fixed increase. Maine’s minimum wage went up to $7.25 an hour last October and will go up to $7.50 an hour on Oct. 1, 2009.

“I think this is a better way to handle the issue of setting the minimum than having a debate whether another 50 cents an hour is what is needed, or is it 25 cents an hour?” he said.

The proposal would have the Maine Department of Labor set the minimum wage every year on Jan. 1 starting in 2010 based on the federal Bureau of Labor Statistics’ consumer price index.

“This will give folks on the minimum wage a needed increase every year,” said Ed Gorham, president of the Maine AFL-CIO. “They will know they will be getting some increase to help pay for increased costs without waiting for the Legislature to act.”

Gorham said in the current recession, the minimum wage can help bolster the overall economy because that money will be spent and that will help everyone.

“It’s the rising tide that floats all boats,” he said. “This will help Maine’s economy.”

But some in the business community see any increase in the minimum wage as a drag on the economy. Chris Hall, executive vice president of the Portland Regional Chamber, said lawmakers should not give up their responsibility to weigh current economic conditions and set a wage based on reasoned judgment.

“I know it sounds attractive in the short term,” he said. “The consumer price index is an unknown, and unknowns are a real danger to business planning.”

Hall said he remembers in the 1980s when the index was increasing by double-digit percentages. He said if the Legislature put the wage increase on “autopilot,” businesses could be hit with large increases before lawmakers could address the issue.

“When we can afford an increase, we can put one in law,” he said,” but something like the CPI is a big unknown.”

David Clough, Maine director of the National Federation of Independent Businesses, said many businesses simply cannot afford any increase in their cost of doing business in a recession. He said the increase already in law for next October will hurt many small businesses.

“It takes money out of the pockets of businesses,” he said. “So when all is said and done, particularly in this economy, to have a high minimum wage hurts Maine’s economy.”

Clough said supporters of increasing the minimum wage always stress that those on minimum wage will spend the increase and help the economy, but they don’t acknowledge that money is coming from a business which can’t use that cash for something else, such as investing in business expansion.

Gorham said opponents of minimum wage increases always make that argument, but he said there are several studies that show every increase in the minimum wage has resulted in greater economic activity.

“We are ready to respond to that argument, like we have in the past,” he said. “An increase is good for the economy.”

Hall said another concern employers have with the measure is the “ripple effect” of every increase in the minimum wage.

“It’s not just the cost of the increase,” he said. “It is that other employees will see the size of the increase of the minimum wage increase and ask for that increase as well. That can add up quickly.”

The Department of Labor estimates there were 20,000 Mainers paid the minimum wage two years ago, including both full- and part-time workers. Most work in food preparation jobs and in the lodging industry.

Maine and New Hampshire currently have the lowest minimum wage in New England. Connecticut, Massachusetts and Vermont are at $8 an hour and Rhode Island at $7.40 an hour. Maine’s first minimum wage — in 1959 — was $1 an hour.

A public hearing on the measure has yet to be scheduled.

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Comments
16 comments on this item
On 1/30/09 at 6:09 AM, BigDog wrote:         Repeated separate thumbs down will cause comment to be hidden

I agree that people that is being payed minimun wage should get a raise every year like all the other workers.As prices go up so should their wages.

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On 1/30/09 at 7:06 AM, tcollins wrote:         Repeated separate thumbs down will cause comment to be hidden

I observe the news coverage of our auto makers in Detroit who make what, $40 or $50 dollars per hour and see that most of them are doing jobs that a 10th grader could do.......It takes more brains, personality and initiative to work the counter at the local MacDonald's....and we're worried about going from $7.25 to $7.50 per hour.....please...invest in the lowest paid workers and obviously they will spend that extra money right back into the economy or at least be able to pay their bills.......$7.50 per hour in 2009 is just ridiculus.........you can't get a bottle of mouthwash and a pound of hamburger for $7.50 at the local supermarket............

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On 1/30/09 at 7:29 AM, freedomfighter wrote:         Repeated separate thumbs down will cause comment to be hidden

A business can rent a slave for 40 hours a week at a cost of about $300. That is a bargain; and you don't have to feed and house them either. They have to feed and house themselves on that $300 a week. American business has a pretty good system in place and they still complain about giving them an extra $.25 an hour or $10 a week.

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On 1/30/09 at 8:13 AM, safedman wrote:         Repeated separate thumbs down will cause comment to be hidden

Hey! Why even go to college. Stay at McDonalds for 20 years and make 100 K annualy.

Our society is doomed thanks to lawmakers and give me for nothing people.

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On 1/30/09 at 8:18 AM, MauricefromBangor wrote:         Repeated separate thumbs down will cause comment to be hidden

Try getting a practical degree(s) in something practical or learn a skilled trade in life and you won't have to worry about $7.50/hr jobs. No just instead goof off in school and smoke weed instead.

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On 1/30/09 at 8:23 AM, SteveyDee wrote:         Repeated separate thumbs down will cause comment to be hidden

There are ways. If you really want an education you can get one. You just have to work for it. The problem if you keep bumping up the minimum wage everything will be so expensive.

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On 1/30/09 at 8:35 AM, anne_of_mdi wrote:         Repeated separate thumbs down will cause comment to be hidden

safedman, you know who gets something for nothing? The multi-national corporations with all their tax-breaks and givebacks and million-dollar bonuses safely tucked away in overseas tax shelters. Our labor force is one of our greatest resources and is not to be given away. The costs of everything goes up. Why not wages? Workers are just anonymous overhead to businesses anyway. Any employer who gripes about paying minimum wage is already getting away with murder as far as I'm concerned. Even the proposed minimum wage isn't a living wage, not even by half. Not to mention all of the taxpayer-backed social programs needed to support their employees, the "working poor."

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On 1/30/09 at 9:41 AM, JosephMartin wrote:         Repeated separate thumbs down will cause comment to be hidden

This is pathetic!

America cannot compete in the World Market, and Maine cannot compete in the American Market.

And our Legislature wants to make sure it STAYS THIS WAY by chasing away the few businesses remaining in Maine.

Great Ideas People!!!

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On 1/30/09 at 11:07 AM, Knightscross wrote:         Repeated separate thumbs down will cause comment to be hidden

About time. Most Maine workers have to work for Slave Wages. Forget a pay raise. No benefits. Slavery is alive and well in Maine. Increase the Minimum Wage.

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On 1/30/09 at 11:15 AM, SteveyDee wrote:         Repeated separate thumbs down will cause comment to be hidden

Obama's keeping us down. Whitey is gonna pay.

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On 1/30/09 at 12:56 PM, JonAlbrecht wrote:         Repeated separate thumbs down will cause comment to be hidden

Joseph Martin, If Maine can't compete (it can) then your comment makes no sense. Maine has the lowest minimum wage. That should be a competiive advantage compared to our neighboring states. But the truth is Maine's cost structure is very competitive, but our location is poor.

Good bill; needs to pass.

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On 1/30/09 at 1:12 PM, pcme2000 wrote:         Repeated separate thumbs down will cause comment to be hidden

We need to pass this bill.

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On 1/30/09 at 5:18 PM, sassy08 wrote:         Repeated separate thumbs down will cause comment to be hidden

About time this law is looked at! Tired of small businesses crying they can't take the wage hike, but then some (not all) of those same few who seem to be making a pretty good profit, turn around and EXPAND their business! Can't afford to give higher wage earnings/health benefits to the very people who helped in the higher profits thus CONTRIBUTING to the business expansion but they can further pad their own pockets! Talk about hypicritical! As the cost of living goes up (and it looks like skys the limit right now), the minimum wage should too, at a steady rate. A person shouldn't have to have 2 or more jobs just to eke out a decent, basic living to try to keep up with ever rising costs ( all except their paychecks). We in this state are well below most other states in minimum wage earnings, about time we caught up, don't ya think! Besides, increase is needed also to pay for all the over taxing in this state as well! Pretty soon we'll be paying for the air we breath! Or is there a hidden tax for that now?!

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On 1/30/09 at 6:01 PM, vichet wrote:         Repeated separate thumbs down will cause comment to be hidden

This is just great.. Small business' can get screwed in an automated fashion.... No debate, no recourse... just screwed and then someone else without a job. Just great.

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On 1/31/09 at 7:47 AM, safedman wrote:         Repeated separate thumbs down will cause comment to be hidden

anne_of_mdi

We don't live in Californistan. Most small businesses can not afford to pay people $10 to $18 and hour. Bump the Min wage and watch people get laid off. Is that a good trade to you?? I think not

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On 2/11/09 at 12:46 PM, bumpinroad wrote:         Repeated separate thumbs down will cause comment to be hidden

if a 25 cent increase in minimum wage is going to drive a small business out of business then maybe they shouldn't be in business.....never heard of such hog wash....

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