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Raise the minimum wage? Pro and con

Question 4: Do you want to raise the minimum hourly wage of $7.50 to $9 in 2017, with annual $1 increases up to $12 in 2020, and annual cost-of-living increases thereafter; and do you want to raise the direct wage for service workers who receive tips from half the minimum wage to $5 in 2017, with annual $1 increases until it reaches the adjusted minimum wage?

On Nov. 8, voters will decide whether Maine employers must give the state’s lowest-wage workers a raise. 

Proponents of Question 4 say the state’s current minimum wage of $7.50 an hour hasn’t been increased in years and is far too low for any Mainer to live on. They want to raise it to $12 an hour by 2020 and make future increases automatic, based on the cost of living. Proponents also want to increase the wages paid to tipped workers — such as waiters and waitresses — by regularly adding to the $3.75 an hour those workers make until they, too, reach minimum wage in the next several years.

Opponents say such mandated wage increases will hurt the elderly, who can’t afford to pay more for goods and services if businesses raise their prices to pay for those higher wages. They also say an increase will hurt businesses in general and restaurants in particular, because restaurants operate on thin profit margins and can’t afford to pay servers double or triple what they’re paying now.

Maine’s minimum wage, which is 25 cents higher than the federal minimum wage, has been a topic of debate for years. Other attempts to raise it have failed, including a recent Republican-led effort, which sought to head off this November’s referendum by raising the minimum wage to $10 an hour by 2020.

Lawmakers have been unable to agree on a new minimum wage. The referendum was citizen-initiated.

Yes on 4

If the referendum is approved, 181,000 Mainers — about a third of Maine’s workforce — will get raises by the time the new minimum wage is fully implemented in 2020, according to a report by the Maine Center for Economic Policy. Nearly one in three working seniors would get a raise.

“This is an issue of basic fairness and it’s a desperate issue for thousands of families in Maine,” said Mike Tipping, spokesman for the Maine People’s Alliance, a backer of the Yes on 4 campaign. “The minimum wage hasn’t increased for the past eight years, but the cost of groceries, of rent, of everything else, has. The people of Maine are falling farther and farther behind.”  

Supporters say the current $7.50 minimum wage, about $300 a week for a full-time job, is far too low. They believe $12 an hour, about $480 a week, would be closer to a livable wage.

Community Concepts, which helps low-income families in Androscoggin, Franklin and Oxford counties, has taken no official position on Question 4, but CEO Shawn Yardley agreed the current minimum wage is not enough to sustain someone.

“If anyone tried to live on $7.50 an hour and find a rent in Lewiston and have reasonable access to transportation, the numbers just don’t work,” he said. “And if you’re responsible for children or maybe a senior in your home, something needs to happen.”

Proponents say raising the minimum wage would benefit more than just workers. They believe it would get more Mainers off welfare because workers would start earning enough to pay for their own food and housing. They also say it would help the state’s economy and Maine businesses because people spend more when they earn more.

The Maine Small Business Coalition is one vocal supporter of Question 4. So is Jim Wellehan, president of Auburn-based Lamey-Wellehan.

“Our taxpayers subsidize the people who are underpaid by corporations, with food stamps, with health care, with subsidized housing,” said Wellehan, whose shoe stores’ employees make, on average, about $15 an hour. “Keeping people out of the worst of situations costs taxpayers that way, so why not just have businesses do it?”

If Question 4 passes, restaurants will have to make the biggest wage jump. Currently, they have to pay most tipped workers $3.75 an hour, or half the regular minimum wage. Under the proposal, they would have to gradually increase that pay to full minimum wage — at least $12 an hour — over the next seven years or so.

Proponents understand that increase won’t be easy for every restaurant, but they believe it can and should be done. Tipping points to 2015 U.S. Department of Labor statistics that show waiters and waitresses in Maine earned an average of $10.79 an hour, including tips. That’s just over $22,400 a year.

He noted that seven states, including California, Oregon and Nevada, already require tipped workers to be paid full minimum wage and it hasn’t been a problem there.

“All of them have higher base wages overall than we have here in Maine,” he said, “and the restaurant industries there are thriving.”   

No on 4

Others say the proposal goes too far too fast.

Gov. Paul LePage has been one of the most outspoken opponents of the referendum, publicly railing against it repeatedly. LePage says the proposal will hurt Maine’s elderly by driving up costs.

Last week, he equated backing the referendum with attempted murder and said Tipping and Ben Chin, another Maine People’s Alliance member, should be jailed.

“They are deliberately and knowingly hurting Mainers,” LePage said during a WGAN radio interview Friday, according to the Portland Press Herald. “To me, when you go out and kill somebody, you go to jail. Well, this is attempted murder in my mind because it is pushing people to the brink of survival.”

Others have been less outspoken but just as certain Question 4 is wrong for Maine.

“It basically is going to have a disastrous effect on restaurants and, frankly, on employees and customers, as well,” said Steve Hewins, head of the Maine Restaurant Association, which has been a leader of the No on 4 campaign. “We’re not opposed to a measured increase in the minimum wage. That’s not, unfortunately, the problem with Question 4. The problem is that restaurants —  now they would be faced with doubling the wages of their servers. There are no restaurants in Maine that can absorb that type of increase. They’d basically be faced with trimming their staff or raising menu prices, which hurts a lot of people, obviously. Or going out of business, frankly. That’s it. Three choices.”

While supporters of Question 4 believe a higher minimum wage will help businesses, Lewiston Auburn Metropolitan Chamber of Commerce President Matt Leonard estimated that 80 percent of his 1,164 members are opposed. 

Leonard said the local chamber is in favor of addressing the minimum wage — and might even be in favor of raising it, but the chamber believes Question 4 would too greatly affect restaurants.

“The (profit) margin for restaurants is 3 to 5 percent to begin with,” he said. “So an increase in costs will certainly destroy that. It’s going to really change how our restaurants do business in the state of Maine, where the tourism industry is particularly important.” 

And, Leonard said, servers already earn a good living and don’t necessarily need the boost.

Some restaurant owners earlier this year provided legislators with audited tax statements that showed their servers made $20 to $30 an hour or more with tips.

“They are the most well-paid employees in a restaurant,” Leonard said. “They’re actually going to get a pay decrease.”

Hewins pointed out that no state has made such a change in recent decades. And most, he said, have never had to change because they’ve always maintained a single minimum wage.

“So their economy was not thrown into disarray like this would,” he said.


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