Minimum Wage

Minimum wage law hurting small business and Maine’s most vulnerable

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They say elections have consequences, and in the case of the minimum wage law that passed by referendum in 2016, the unintended consequences are harming our most vulnerable citizens.

A few weeks ago, the minimum wage increased for the third time in three years as part of the sweeping minimum-wage referendum that passed in 2016.

As predicted, certain sectors of the economy are struggling to keep up with the rapid wage inflation, and those who are most impacted are our elderly, those living on fixed incomes and rural Mainers.

In my own community, a beloved breakfast establishment, On the Way Cafe, had to close their doors on January 1, because they couldn’t absorb yet another wage increase, and there are more increases yet to come.

In only three years’ time, the minimum wage has gone up by $3.50 an hour. That’s a lot for any business to handle. Next year, it will increase by another dollar, resulting in a 60 percent increase in the minimum wage spread out over only four years’ time.

To compensate for wage inflation, the cost of living in Maine has increased for everyone. From the cost of daycare for working families to the cost of groceries, eating a meal at a restaurant and buying an ice cream cone at the local ice cream parlor, everyone is beginning to feel the pinch.

But some have not been able to increase prices to compensate for the added cost of doing business.

Last session, the legislature passed emergency legislation to provide an increase in the Medicaid reimbursement rate for companies that provide critical home-based and community-based care. These services that cover some of Maine’s most vulnerable citizens were in jeopardy as the inflation of minimum wage outpaced the rate that providers were reimbursed by the state.

We also passed emergency funding to help nursing homes cover their increasing overhead costs. These emergency funds, while necessary, were only a band-aid, as these needs will arise each year with the increasing wage.

Maine’s population is the oldest in the country. It’s critical that we take care of our elderly and allow them to age with dignity and remain in their own homes for as long as possible.

We can’t allow our elderly on fixed incomes and disabled to be harmed by an unreasonable minimum wage law.

Also suffering are bottle redemption centers, as the increased overhead has proved to be too high of a burden for some. The reimbursement rate for bottle returns is set by statute and not responsive to the minimum wage law, making it increasingly difficult for businesses to recoup the cost of wage increases.

Recently, a bottle redemption center in Bangor that has been in operation for 36-years announced that they can’t afford $11 an hour, so they are closing their doors. In addition to helping keep our roadways and transfer stations free of recyclable bottles, this business once created 17 jobs for area residents. I am sure the people of that community will feel this loss as they will now have to travel further to recycle bottles and these jobs will no longer exist.

To help the bottle redemption centers that have managed to hold on, I have submitted legislation to investigate how we can help these businesses survive. They provide an important service for our state, and we need to be sure that they have every opportunity to stay afloat.

These are only a couple minimum wage-related bills that I have submitted this session. I look forward to continuing this important discussion with my colleagues in Augusta.

About Jeff Timberlake

Senator Jeff Timberlake, the Assistant Senate Republican Leader, is currently serving his first term in the Maine State Senate. He represents the people of Senate District 22, which consists of Litchfield, Wayne, Durham, Greene, Leeds, Lisbon, Sabattus, Turner and Wales.

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