“This initiated bill raises the minimum wage to $9.00 per hour in 2017 and by $1.00 per hour each year after that until it is $12.00 per hour in 2020.  The minimum wage then increases at the same rate as the cost of living.  The minimum wage for workers who receive tips increases to $5.00 per hour in 2017 and then by $1.00 per hour each year until it matches the minimum wage for all other workers, which occurs no sooner than 2024.”

-Summary, proposed amendment (Sec. 1.  26 MRSA §664, sub-§1, as amended by PL 2007, c. 640, §4)

CEI supports the 2016 minimum wage referendum, viewing a significant increase in Maine’s minimum wage as a starting point for an inclusive economy.

Working Mainers have coped with stagnant wages for many years, despite their rising productivity and educational attainment.  Meanwhile, inflation has shrunk the purchasing power of Maine’s minimum wage by about 15% since it was last raised in 2009. A minimum wage increase will lift thousands of hard working Mainers and their families out of poverty and move a quarter of Maine’s workforce closer to the goal of a “living wage.”

The minimum wage legislation proposed by the referendum question can be strengthened by: 1) linking the minimum wage increase schedule to economic cycles of recovery and recession; 2) recognizing stark differences in Maine’s regional labor markets; and 3) reducing pressure on small businesses, which can find it difficult to absorb a large or sudden increase in their payrolls.  CEI supports consideration of measures like these, which other states have included to temper potential negative effects on businesses or workers, in future years.

While raising the floor for lower-wage workers is essential, it is also crucial to build ladders so that more low-wage workers have opportunities to move up to higher levels of employment, compensation, and career advancement. This will require increased and strategic investment in education and training, as well as improvements in how education and training prepares students and workers for jobs of the future. It also requires working with employers, industry associations, and labor unions to develop career paths through skills training, internships and apprenticeship programs that offer on-the-job learning.

As a source of capital and business advisory services to small and medium-sized businesses across the state, CEI will reach out to these and other companies that are affected by a potential change in law and assist them in minimizing adverse effects on their enterprises, workers and customers.  At the same time, we will build out the next phase of our quality jobs strategy to help workers take steps up the skills and income ladder.