The minimum wage has steadily lost value now for nearly 50 years, even as the people who hold low-wage jobs have gotten more educated and productive, more likely to be a family’s breadwinner, and less likely to advance to a better job.
That has left millions of Americans unable to support themselves and their loved ones even while working full-time, and that’s why we are endorsing a yes vote on Question 4 on the Nov. 8 ballot to raise Maine’s minimum wage.
Even though we have real concerns over how that increase would affect some workers and business owners, this reform is long overdue.
Experience shows that even though some Mainers would be harmed by an increase in the minimum wage, many more would benefit.
Question 4 would raise the statewide minimum wage from $7.50 an hour to $9 in 2017, then by $1 each year until it hits $12 in 2020, after which it would be indexed to inflation. The minimum wage for tipped workers, now set at half the regular minimum, would also increase gradually, until it reaches $12 in 2024.
That’s a dramatic increase, but it is necessary to make up for the purchasing power the minimum wage has lost since its peak.
The increase would not only go to teenage workers in entry-level and part-time jobs, as many assume. The largest portion of workers making exactly the minimum wage may be teenagers, but as the economy has gained more low-wage jobs in fields like social services and retail, it has been adults who fill them, and find it difficult to advance to higher-paying positions.
Of the estimated 133,000 Mainers who would be directly affected by the wage increase, only 16,000 are teens, and more than half work full-time. Add in the Mainers who make at or just above $12 a hour now and can reasonably expect a wage increase of some kind, and 90 percent of those affected are over 20. More than half are between 20 and 39. Another third are seniors. One in four supports a child.
A wage increase means they will be better able to afford food, school supplies, stable housing and health care, the building blocks for healthy and productive lives. They will undeniably be better off, as will the businesses that benefit from hundreds of millions of dollars in new spending.
WHO WILL BE HARMED
The question of who will be harmed by a wage increase is more difficult to answer. It’s reasonable that businesses in low-margin industries like retail and food service would find it difficult to absorb such a significant hike in employment costs, yet the mass layoffs and business closures predicted to accompany wage increases have not materialized.
Researchers at the University of Washington found that when Seattle increased its minimum wage to $11, on the way to $15, the very slight decline in jobs and work hours for low-wage employees was more than offset by higher wages, and that there is no compelling evidence the wage hike is hurting job creation or increasing prices significantly.
That’s similar to the conclusions reached by economists Dale Belson and Paul J. Wolfson, who synthesized hundreds of studies and found that increasing the minimum wage has only minimal impact on employment and hours.
In addition, they found, increases reduce the wage inequality that is growing to historic levels.
Minimum wage increases also played a role in lifting 3.5 million Americans out of poverty last year, the largest percentage decline since 1999, and helped personal income grow by 5.2 percent, the greatest leap since record-keeping began in 1967.
There are caveats. Most studies involve more modest wage increases than those proposed in Question 4. In some cases, there has not been enough time to fully gauge the consequences, and it’s difficult to know how effects will differ from Portland to, say, Presque Isle. And there are certainly some workers and businesses who are more likely than others to be harmed.
TIPPED WORKERS
Under Question 4, restaurants eventually would have to pay servers the full minimum wage, increasing costs. It is likely that many restaurants would increase prices, but only slightly, if the research holds. Many would also discourage tipping, in order to keep the cost of the meal down for customers.
That’s an enormous change for a culture used to tipping, and it could hurt servers who now make a good living on the strength of tips.
But too many tipped workers have unstable incomes based on the time of year and where they work. Nearly half depend on public assistance. Some are the victim of wage theft when employers illegally withold wages, tips or benefits. Minimum-wage laws have to consider these employees, too.
Increasing the minimum wage is full of these trade-offs. But it is clear to us that a strong minimum wage is necessary to give Americans working in what has become a service economy the pay they need to build a life for themselves and their families.
We haven’t had that sort of minimum wage in quite some time – it’s purchasing power peaked in 1968, just one example of the ways workers have been devalued, along with the loss of bargaining power and benefits, and through the manipulation of overtime laws.
Fortunately, the tide has started to turn. That’s a lot for business owners to deal with. They are not wrong when they say elected officials should find ways to comprehensively address the problems facing workers in the new economy.
But things have gone the wrong way for a long time, and we have no faith that Congress or our Legislature will address them anytime soon.
That leaves the ballot box as the best way to make a day’s work worth what it once was. Question 4 is a good start.
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