Commentary

Posik: Municipal Minimum Wage Dispute Unavailing

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Can individual municipalities in Maine assess their own minimum wage, or is that the job of our elected officials in Augusta?

There has been plenty of discord on L.D. 1361, a bill proposed by Sen. Andre Cushing, R-Hampden, which would address whether the state or individual municipalities have the ability of setting their own minimum wage in Maine. Proponents of the bill say only the state has the ability to increase the minimum wage, but many democratic leaders in Portland, Bangor, and Augusta have openly encouraged discussion on the topic and are interested in assessing a minimum wage in their respective municipalities.

For these municipalities to do so would circumvent state law and undermine state governance.

The bill comes out as a combative response to the efforts made by Portland Mayor Michael Brennan, who initially proposed a municipal minimum wage increase in Maine for his city to $9.50 an hour starting in July, and then a hike to $10.68 an hour starting in 2017.

While Mayor Brennan’s initial proposal was intrepid and excessive, the Portland City Council is currently debating whether or not a minimum wage increase to $8.75 an hour starting in January, followed by 50-cent increases in 2019 and 2020 will take shape in Portland.

If the council passes this resolution without pushback from the state or Governor LePage, the lowest paid, most unskilled workers in Portland could be earning up to $9.75 an hour in less than five years.

Understand the position of Mayor Brennan; he believes an increased wage will make his city more attractive economically, with competitive wages that help tackle the unaffordable cost of living in Portland.

But can Brennan and the city of Portland enact this measure, and do they have the authority to do so?

To an extent, Brennan may be right. Increased wages would put more money in the pockets of consumers to help pay for rent and other living expenses, but what effect would that have on the local economy?

Local, family-owned businesses in the area wouldn’t be able to afford to pay their employees this increased wage, and would be forced to increase the price of their goods and services to turn the same profit as they were before. This will, in turn, raise the cost of living on goods and services that are necessary for consumers like food and clothing.

Small businesses in Maine account for over 95% of all employers, and almost 60% of the private sector labor force. If minimum wage increases occur in large business centers of our state, both producers and consumers will face drastic and severe economic challenges moving forward.

You also have to take into account the trends that may occur in other areas of the state if these changes happen in our larger cities. Democratic leadership in other areas of the state may try to enact minimum wage increases in their respective areas if places like Portland or Bangor go through with the measures they’re currently discussing.

We don’t need specific areas of our state paying different wages to the lowest, unskilled workers. Everyone needs to be on the same scale to prevent confusion and maintain a business climate where small, local family-owned businesses have a fighting chance.

I have no doubt in the near future that on both the federal and state level, we will advance towards a higher minimum wage. However, allowing towns to move forward with these measures before states do, especially in a state like Maine where small business is the engine of our economy, will ultimately raise the cost of living and burden small businesses. Those who already own businesses and those looking to start one in the future will already be at a disadvantage if minimum wage increases occur at the municipal level.

About Jacob Posik

Jacob Posik, of Turner, is the director of communications at The Maine Heritage Policy Center (MHPC) and the editor of The Maine Wire. He formerly served as a policy analyst at MHPC. Posik can be reached at jposik@mainepolicy.org.

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