AUGUSTA, Maine — Union members gathered at the State House on Thursday to press for a measure that would increase the state’s minimum wage by a dollar and index it to the national Consumer Price Index so it rises annually with inflation.

The Maine State Chamber of Commerce, representing some of the state’s larger businesses, opposes the measure.

Rep. Scott Hamann, D-South Portland, is sponsoring the bill, LD 611, which would increase Maine’s minimum wage to $8.50 on Oct. 1 and raise it annually by the same percentage as the Consumer Price Index.

During a rally sponsored by the Maine AFL-CIO in the State House Hall of Flags, Hamann pitched the measure as the right thing to do for the state’s low-wage workers and a move that would spark economic activity.

“If we put money in the hands of the people most likely to spend it and most likely to spend it locally, this drives up consumption in Maine’s economy,” he said. “If we increase consumption and demand for goods and services, businesses will hire more to keep up with demand, which is a net win for the state of Maine.”

Maine, where the minimum wage has been $7.50 an hour since 2009, is one of 19 states with a minimum wage that exceeds the national level of $7.25 an hour, according to the U.S. Department of Labor. In New England, only New Hampshire, which uses the federal minimum wage, has a lower minimum wage than Maine. Vermont’s minimum wage, $8.60 an hour, is the highest in the region, and is indexed to inflation.

“Companies are using the excuse of a bad economy as a reason for paying unfairly low wages. This is not the result of the bad economy. It is the cause of the bad economy,” said Paul Nickerson of Lewiston, who said he earns $9.75 per hour after he lost a manufacturing job that paid $18 an hour. “Nobody who works full time should live in poverty, and yet this is the case for low-wage workers.”

Peter Gore, vice president of advocacy and government relations at the Maine State Chamber of Commerce, said it’s not the right time to raise the minimum wage. Maine businesses that are struggling in a weak economy would have difficulty absorbing such a hike, he said.

The cost of doing business in Maine was already 8.6 percent higher than the national average in 2010, Gore noted, citing Moody’s Analytics’ Cost of Doing Business index.

“Our economy just doesn’t support that kind of wage an hour increase,” Gore said. “From an economic standpoint, raising it by a dollar and indexing it annually, putting that element on automatic pilot, that’s just a bad idea.”

Gov. Paul LePage’s administration also opposed the measure, with representatives from the state Departments of Labor and Economic and Community Development testifying against Hamann’s bill at Thursday’s public hearing.

“Undeniably, we need to focus our efforts on reducing the costs of doing business in this state, not helping drive those costs up,” Doug Ray, the Department of Economic and Community Development’s legislative liaison, said in prepared testimony to lawmakers. “Increasing the minimum wage will not help incentivize more skilled employees to enter the workforce and may have the damaging effect of reducing employment in Maine.”

Lawmakers have made numerous attempts in recent years to raise the state’s minimum wage. In 2010, then-Rep. John Tuttle, D-Sanford, proposed a measure that would index it to inflation, but a legislative panel voted it down, saying it was wrong to raise the minimum wage in a weak economy.

A year later, Tuttle sponsored a measure to raise the minimum wage to $7.75 in 2011 and to $8 in 2012. That measure was also unsuccessful.

Nationally, the minimum wage in 10 states rose at the start of the year, and President Barack Obama last month proposed raising the national minimum wage to $9 an hour in his State of the Union address.

AFL-CIO members Thursday also pushed another bill, LD 890, that would require goods purchased by the state be American-made whenever possible.

BDN writer Christopher Cousins contributed to this report.