Maine lawmakers are divided over a proposal to do away with the cost-of-living adjustment for the state’s minimum wage.
Under the proposed Republican-led legislation, the state minimum wage would be set at $14.65 per hour — the current rate — and all references to cost-of-living increases would be removed.
LD 206 was sponsored by Sen. Jeff Timberlake (R-Androscoggin) and cosponsored by Rep. Joshua Morris (R-Turner), Sen. Jim Libby (R-Cumberland), Sen. Trey Stewart (R-Aroostook), Rep. Billy Bob Faulkingham (R-Winter Harbor), and Rep. Sheila A. Lyman (R-Livermore Falls).
Under current State Law, the hourly minimum wage must be increased in accordance with the cost of living as of August the previous year, rounded to the nearest five cents.
The most recent cost-of-living increase went into effect on January 1 of this year, bringing it up from $14.15 to the $14.65 per hour that would be codified under the proposed legislation.
[RELATED: Maine’s Latest Minimum Wage Increase Takes Effect on Wednesday, January 1]
“What this bill does is provide much-needed stability for businesses, allowing them to plan their budgets without the fear of unpredictable wage hikes year after year,” said Sen. Timberlake when introducing this bill. “By eliminating the automatic [cost of living adjustment], we’re giving businesses a fighting chance to stay competitive without having to pass those higher costs onto consumers.”
“When businesses have to raise their prices to keep up with rising wages, it hurts everyone in the community. People may be making a little more money, but if the price of everything else goes up, they’re no better off,” Timberlake said. “This bill helps break that cycle and gives us the ability to make wage decisions based on a broader understanding of the economic landscape.”
A representative of the Maine Center for Economic Policy (MCEP) testified in opposition to this bill, arguing that “without this adjustment, wages stagnate while expenses continue to rise, making it increasingly difficult for low-income workers to afford their daily needs.”
“An annual minimum wage [cost of living adjustment] has benefits beyond those that accrue to impacted workers – the [cost of living adjustment] benefits local economies as lower-wage earners are more likely to spend more in local businesses; it helps employers attract and retain workers and limits turnover costs; it maintains employers’ incentive to invest in productivity improvements rather than relying on increasingly low wages, which generally promotes economic growth,” MCEP said.
[RELATED: Maine Lawmakers Propose Eliminating the Cost-of-Living Adjustment for the Minimum Wage]
Following an April 1 work session, members of the Legislature’s Labor Committee were split along partisan lines over whether or not this bill should be approved.
Although this bill was on the Senate calendar for Wednesday, May 7, the bill was tabled pending acceptance of either the Committee report in favor of the change or the one opposing it.
