AUGUSTA, Maine — While the minimum wage increase passed by voters in November 2016 goes into effect Saturday, the exact number of workers who will see an increase in their next paycheck was unclear Friday.
The hourly rate will increase from $7.50 to $9 per hour, and the wage for workers who receive tips will increase from $3.75 to $5 per hour.
How long the increase for tipped workers will remain in place is uncertain. Gov. Paul LePage, who opposed the referendum, has said he will propose various changes to the law, including slowing the wage increases, canceling the future cost-of-living increases, set to kick in in 2020, and restoring a lower minimum wage for workers who earn tips.
The increase for tipped workers was opposed before the election by a group of restaurant owners, bartenders, wait staff and other restaurant workers in Bangor. Less than a week before the election, Kyle Grey, a waiter at a downtown Bangor eatery, estimated that of the $20 to $40 per hour most restaurant staff make in area bars and restaurants, about 90 percent comes from tips. He and other members of the Restaurant Workers of Maine opposed the referendum.
Before the campaign, tipped workers expressed concerns that people would tip less or not at all after eliminating the tip credit.
On Nov. 8, voters with more than 55 percent of the vote approved increasing the minimum wage to $12 per hour by 2020 as part of a national push by progressive groups. Wages of tipped workers are to increase to an hourly rate of $12 by 2024.
There were 14,400 workers in Maine making $7.50 or less in 2015, according to statistics provided by the Maine Department of Labor. A majority of those work in restaurants and bars.
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“Of the 359,000 workers paid at hourly rates in Maine, about 46,000 earned less than $9 per hour in their primary job in 2015,” Glenn Mills, chief economist from the Center for Workforce Research and Information, said recently. “That is nearly 13 percent of hourly workers and 7 percent of all workers. Nearly two-thirds of jobs that paid less than $9 per hour were in the leisure and hospitality and retail trade sectors. Leisure and hospitality is mostly restaurants and pubs, but also includes lodging places, gambling and other recreation industries.”
Federal data indicate the wage hike will have the broadest impact this year in Penobscot County, where it’s estimated that one in four jobs starts at less than $9 per hour.
Cumberland, Penobscot, York and Kennebec counties have the highest number of workers in jobs with starting wages below $9 per hour.
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Unlike the estimates from Mills, the starting wage estimates don’t reflect exactly how many people are making wages at that level. Rather, they reflect how many people are in occupations where the starting wage is estimated to be lower than $9 per hour.
For those job categories, the minimum wage hike stands to have an impact throughout the pay scale for that job.
That data shows the industries that will be most impacted by the increase by county, and confirms jobs in restaurants, sales and personal care will see the biggest change.
In Penobscot County, for instance, retail salespeople, cashiers, janitors and cleaners, personal care aides and waiters and waitresses make up more than half of the workers in industries with a starting wage lower than $9 per hour.
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The political battle to increase the minimum wage was led last year by the Maine People’s Alliance and Mainers for Fair Wages. The Maine State Chamber of Commerce, which supported a failed legislative effort to increase the minimum wage to $10 per hour last spring, opposed the referendum.
On the eve of the increase going into effect, both sides reiterated statements made during the campaign.
“The people of Maine have spoken clearly, and the minimum wage increase is now law. Today, it’s a little easier for tens of thousands of Maine mothers to feed their families, and we’re that much closer to creating an economy that works for everyone,” Amy Halsted, campaign manager of Mainers for Fair Wages, said Friday in a press release.
Peter Gore, a consultant to the opposition campaign and lobbyist for the Maine State Chamber of Commerce, said Friday that while the change may not impact businesses in populous southern Maine or service centers such as Bangor, it could impact small businesses in rural areas of the state.
“The choices they face are raising prices, cutting staff or closing their doors,” he said.
BDN writers Darren Fishell and Nick Sambides Jr. contributed to this report.