Daily Catch

Maine progressives continue to offer misleading information about the minimum wage

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In an article published Thursday on the Maine Beacon – the online opinion service of the Maine People’s Alliance – author Dan Neumann criticized the Maine State Chamber of Commerce and the Maine Heritage Policy Center’s (MHPC) skepticism over a statewide paid sick leave proposal by repeating the same tired, disproven claims about the impact of Maine’s minimum wage law.

The piece, titled “Opponents proven wrong on minimum wage make same attacks on paid sick leave”, questioned legislative testimony submitted by the Chamber and a 2016 report published by MHPC outlining the negative economic effects of a $12 an hour minimum wage coupled with the elimination of the tip credit.

Neumann’s rebuttal relied on a pair of analyses conducted by the Maine Center of Economic Policy (MECEP) that have been thoroughly debunked by Maine’s Department of Labor. In doing so, Neumann’s work reflects the same mistakes made by the original authors.

The clever tactic employed by both Neumann and MECEP is that they do not directly attribute economic gains in 2017 to the minimum wage, but instead discount the projections made by opponents of the minimum wage increase because they did not immediately come true. It is a dishonest intellectual and rhetorical practice, evidenced most clearly by the conclusion of MECEP researcher James Myall’s analysis in Jan. 2018:

“While it is difficult to isolate the effects of the minimum wage increase on jobs or wages by itself especially since the US economy continues to grow, the fact remains that Maine’s voter-approved minimum wage increase coincides with one of the largest real-term gains in private sector wages in fifteen years…”.  

Not in one of the multiple analyses conducted by Myall, or any other MECEP analyst for that matter, actually teases out the effects of the minimum wage increase. Instead, they simply highlight recent data showing an improving economy and say: “See, the minimum wage must be helping, not hurting!”

There are several problems with this approach.

The first minimum wage analysis conducted by MECEP in 2018 falsely attributes increases in total wages paid for the first six months of 2017 to the increased minimum wage. But according to economists at the Maine Department of Labor’s Center for Workforce Research and Information, which is the source of the information Myall is citing, total wages paid were unusually low in the fourth quarter of 2016 and unusually high in the first quarter of 2017.

This is because employers delayed bonuses and other performance payments from December 2016 to January 2017 with the expectation that the Trump Administration would reform federal tax policy.

A MECEP analysis released on April 2, 2018 makes similarly incorrect assertions. MECEP claims that new employment and wage estimates indicate that the law has not forced employers to cut hours for minimum wage workers, but the data they cite does not include information about hours worked. Instead, MECEP estimates hours worked by using two different data series, each with different coverage, to calculate an increase. However, because the data sets used by MECEP cover different time periods and industries, they are not directly comparable.

Finally, in the same April 2 report, MECEP uses data that the Bureau of Labor Statistics openly warns against using to make conclusive comparisons about wage earnings. As the Maine Department of Labor put it in one of former Gov. Paul LePage’s weekly addresses:

“Data that is comprised of sets of data collected over three years is not representative of a single year of employment gains, especially since two of the years included in that data set, 2015 and 2016, preceded any increase in the minimum wage.”

Finally – and perhaps most importantly – both Myall and Neumann fail to acknowledge where we are today and how things have changed since MHPC released its 2016 report on the minimum wage. The findings of the report are predicated on a $12 an hour minimum wage and the elimination of the tip credit. However, Maine’s minimum wage has not yet reached $12 an hour, and the tip credit was almost immediately restored by Maine lawmakers after the passage of the 2016 initiative that increased Maine’s minimum wage.

Certainly, the full projected impacts of a law – whether positive or negative – will never come to fruition when a governing body substantially rewrites the law to eliminate some of its most controversial aspects.

This level of dishonesty is nothing new for Maine progressives. Much like the minimum wage, soon we will hear about how paid sick leave will solve every last problem that exists in our state, simply to appease the out-of-state donors who will bankroll their ballot initiative campaign from start to finish.

About Jacob Posik

Jacob Posik, of Turner, is the director of communications at The Maine Heritage Policy Center and the editor of The Maine Wire. He can be reached at jposik@mainepolicy.org.

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