ELLSWORTH, Maine — Within a few years of opening its new mouse production facility on Kingsland Crossing, which is scheduled to begin operations in January 2018, The Jackson Laboratory plans to have 230 employees working there, three-quarters of whom are expected to be new hires, lab officials have said.
With the lab’s announcement on July 12 that they have increased their lowest full-time wage to $15 per hour, it means those 150 or so new employees collectively will be earning more than $4.5 million a year. That’s in addition to the lab’s nearly 800 existing employees, of which 539 are based in Maine, who collectively are expected to see their annual wages go up by $3.8 million because of the pay hike.
On the face of it, the income boost is good news for the region economically. But, given the relatively small labor pool in eastern Maine, it raises questions: Where will the lab’s new employees come from? What kind of effect will the pay increase have on the region’s tight labor market?
According to Charles Hewett, the lab’s executive vice president and chief operating officer, the wage increase, which went into effect July 9, has been implemented to reward existing employees for increased productivity — but it also is aimed at helping to keep and recruit new employees.
“[The Jackson Lab] also anticipates that the increase in its wage scales will help ensure employee retention as well as assist in attracting and hiring committed new employees as the Laboratory grows and prospers in Maine, Connecticut and California,” he wrote in the July 12 statement.
The Jackson Lab, which is renovating the former Lowe’s building at 21 Kingsland Crossing in Ellsworth into its new mouse vivarium, has faced difficulty for many years in keeping its available positions filled. Though the lab has had layoffs in recent memory, it has been consistently expanding and creating new positions for much of the past 25 years.
Before the pay raise, the lab’s lowest full-time wage for employees who have passed their initial six-month probationary period is $10.75 per hour, more than $3 higher than the state’s mandated minimum wage of $7.50 per hour.
Still, each day the lab buses employees from the Bangor area and from western Washington County to its Bar Harbor campus, a distance of about 50 miles for each location, to ensure it is adequately staffed. On top of that, as the lab indicated in its wage-increase announcement, it now has more than 250 positions unfilled at its three campuses in Bar Harbor, California and Connecticut, of which roughly 150 are based in Maine.
The lab is not the only regional employer in a near-constant state of recruitment and training. In the summer, during the pell-mell tourist season, the labor market in the area is stretched even thinner, with many hoteliers and restaurateurs dependent on foreign labor to make sure the house cleaning and kitchen staffs at their seasonal businesses are full. Many small seasonal employers who do not hire foreign workers say they have difficulty hiring and retaining employees between Memorial Day and Columbus Day.
What the state’s mandated minimum wage should be has been a hotly debated topic in Maine the past couple of years, with competing proposals failing to win legislative approval in Augusta. A referendum to increase the state’s mandated minimum wage, which if approved by voters would raise it to $12 per hour by 2020, will be on the statewide ballot this November.
Andre Cushing, assistant majority leader in the state Senate, said Friday that he respects and supports any Maine employer such as The Jackson Lab that decides to pay its workers more and that such decisions should not be imposed by the state. Bangor Savings Bank, he added, made the same decision in January, when it set its lowest wage at $13.
“It’s a market-based condition,” Cushing said of what employers pay their workers. “That’s a very different issue than a legislative mandate.”
Such mandates often backfire, he said, and forcing employers to increase hourly wages could result in in employees working fewer hours, tips being significantly curtailed or positions being cut altogether.
Supporters of a mandated increase such as the Maine People’s Alliance and Maine AFL-CIO have countered that the cost of living in Maine has outpaced wages and that the low end of the state’s wage scale needs to be raised so hourly employees can make ends meet.
Philip Trostel, a professor of economics at University of Maine, said Thursday that The Jackson Lab’s decision to raise its lowest wage is a sign that the economy in general is continuing to improve. He said that, while the move likely will have an immediate adverse ripple effect for other businesses in the area, it could provide some benefit to those businesses if the pay raise and the lab’s planned expansion to Ellsworth result in drawing more workers to Hancock County.
Local retail businesses, for example, could get more business if the lab workers become their customers, Trostel said. The lab’s continued expansion also, theoretically, could help spur growth for similar employers, such as the Mount Desert Island Biological Laboratory or area hospitals that are involved in biomedical laboratory work by providing them a broader qualified labor pool to choose from.
The Jackson Lab’s decision to raise its minimum wage, he added, shows that it wants to have the first crack at hiring qualified people in the area who are looking for work.
“It they’re paying more than anyone else is, they’re going to get the pick of the litter,” the UMaine professor said.
Martha Searchfield, executive director of the Bar Harbor Chamber of Commerce, said Thursday that the labor market in the area, and throughout all of Maine, already is tight enough that she does not think The Jackson Lab’s wage increase will make a “huge” difference in terms of making it more difficult for employers to fill positions.
Even before the lab announced it was raising its minimum pay, she said, businesses on MDI — including the chamber — have been raising their starting wages by a few dollars to $13 or $14 per hour.
The lab’s pay increase may put a slight, immediate squeeze on other employers who are looking to fill positions, she said, but it should benefit the region as a whole over the long term. Better pay for more residents in any area is always good for that region’s economy, according to Searchfield.
“Overall, the effect is going to be great for Hancock County,” she said.