Inside Augusta

Maine businesses struggle under minimum wage law

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Advocates claim that by raising the minimum wage, hard-working Mainers working in these positions will be better off, as they will make more money per hour.

But the minimum wage isn’t designed to be a “living wage.” It’s intended to be a training wage that some employers use to bring unskilled workers – often teenagers or young adults who have never held a job before – into the workforce. After a few months on the job, most minimum wage employees are rewarded with raises, which incentivize hard work and are necessary to compete with other employers.

As we all know, that first job is an incredibly important part of growing up. Aside from the usual chores that come with growing up on a farm, my first real job was for Carroll’s Plumbing Supply in Kittery. I served as a gofer – meaning I would go for this and go for that – and do whatever other odd jobs were assigned to me. While learning important life lessons like time management, money management and responsibility, this job provided me with references and put me on the path to higher level employment, and eventually, a career as a teacher.

Unfortunately, opportunities for employment are narrowing these days for Maine’s teenagers, and it’s due to many factors including the drastic minimum wage referendum that passed in 2016 as Question 4. This new multifaceted law put Maine’s minimum wage on a schedule of regular increases, going from $7.50 in 2016 to $12 in 2020 – a 62.5 percent increase in only four years – with the rate continuing to increase annually with indexing each year after that.

Critics argued that by increasing the minimum wage at such an accelerated pace, businesses would struggle to contain costs – often by reducing their workforce – and opportunities for teenagers would disappear.

Sadly, fast forward to 2018, and we can already see opportunities disappearing for our high schoolers, along with other unintended consequences that are harming the very employees the raises are intended to help – adults with families.

That’s why this session the Maine Department of Labor introduced LD 1757, “An Act To Protect Maine’s Economy by Slowing the Rate at Which the State’s Minimum Wage Will Increase and Establishing a Training and Youth Wage.”

Under this bill, Maine would join the rest of the New England states in establishing a training wage that would allow employers to pay minors 80 percent of the minimum wage for the first 200 hours. It would also slow the rate of the increase and eliminate the automatic annual indexing.

Small business owners from all around the state traveled to Augusta to testify in support of this legislation.

Fielder’s Choice, an ice cream stand with four locations in Maine that employs 150 high school students said that under the 2017 minimum wage increase, their sales fell by 5.8% as they had to adjust pricing to reflect their increased labor costs. They fear that as the wage continues to increase, their product will become too expensive and customers will forgo their frozen treats.

Tilton’s Market in Buckfield testified that as the wage goes up, their experienced staff pays the price. They said, “In the past two years I have had to increase wages for teenagers and first time adult hires who have never held a job before and require extensive training. Instead of being able to pay the teen $8 and the experienced employee $12, they are both now making $10.”

LD 1757 has been voted out of committee and is now heading to the House for consideration. I would like to hear from my constituents, particularly small business owners, on this important issue. I can be reached at 287-1505 or dcwoodsome@gmail.com.

About David Woodsome

Senator David Woodsome is currently serving his second term in the Maine State Senate. He represents the people of Senate District 33 which consists of the towns of Cornish, Limerick, Newfield, Parsonsfield, Sanford, Shapleigh and Waterboro.

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