Portland may increase its minimum wage to $9.50 an hour next year under a plan being developed by the mayor and a city task force.
The possible $2-per-hour wage increase for the city’s lowest wage-earners could be presented to the City Council for consideration as soon as September, Mayor Michael Brennan said Tuesday.
The new numbers are the first specifics to emerge since Brennan called for a citywide minimum wage increase during his annual State of the City address in February.
An increase would make Portland the first city in Maine and one of fewer than a dozen cities or counties nationwide to set a minimum wage higher than required by the states or federal government.
Brennan said his proposal is not finalized, but may call for the city to move its minimum wage from the state-mandated $7.50 an hour to $9.50 an hour in January 2015.
In 2016, according to the latest plan, the minimum would increase to $10.10 an hour, followed by a third increase in 2017, he said. After that, the city may consider doing annual cost of living adjustments.
“I think, generally speaking, people recognize $7.50 an hour doesn’t reflect the real world at this point,” Brennan said. “We recognize the fact that paying somebody $7.50 an hour isn’t close to something people can live on in the city.”
Such an increase would affect workers who rely on tips, as well, because they earn a base wage that must be at least half of the minimum. A minimum wage of $9.50 would mean a waiter and waitress would earn at least $4.75 per hour in addition to tips.
In June, the city of Seattle approved a plan to gradually increase its minimum wage to $15 an hour. The minimum wage is $10.74 an hour in San Francisco, $8.50 an hour in Albuquerque, New Mexico, and $11.50 an hour in Washington, D.C. Last month, Massachusetts raised its minimum wage to $11 an hour, the highest state minimum in the country.
Some cities have allowed exceptions, Brennan said, but he is calling for an across-the-board increase in Portland.
“We don’t believe there should be any carve-outs or exemptions for the minimum wage,” Brennan said Tuesday. “It would apply to businesses of all sizes as well as nonprofits.”
Before he submits a formal plan to the City Council, Brennan and the city’s Minimum Wage Advisory Committee will hold a public meeting Aug. 20 to gather comments from workers and businesses. The meeting will begin at 5 p.m. at the Portland Public Library.
Brennan said he doesn’t know exactly how many Portland workers would be affected by a minimum wage increase, but that a statewide increase would affect about 120,000 Mainers. That doesn’t mean all of those people make minimum wage, but their pay is close to that and would be pushed up by an increase, he said.
According to 2012 estimates by the U.S. Census Bureau, 4,600 working Portland residents earn less than $25,000 a year, including 1,400 people who make less than $15,000. A worker earning the $7.50 minimum for a 40-hour week would earn $15,600 a year.
Meanwhile, 1,873 Portland residents make more than $100,000.
STRUGGLING EVEN AT $10 AN HOUR
At Arabica, a coffeehouse on Free Street in downtown Portland, barista Christopher McClure said he earns $10 an hour. Though his hourly wage is higher than the state minimum, McClure, who is a graduate of Gordon College in Wenham, Massachusetts, said he barely earns enough to pay his monthly rent and college debt.
After paying his share of the $1,150-a-month apartment rent – he lives with three other people – and paying his student loan, he has $50 to $100 left over for spending money.
“There is pretty much nothing left to put into my savings. But it’s OK,” said the 26-year-old McClure, who majored in English. “Obviously, I’m not living extravagantly by any means. But I feel like I make enough to not live like a hermit.”
Still, he feels an increase in Portland’s minimum wage is needed.
“I feel like, why the hell wouldn’t you raise it? For people in my situation who are making less than I do, I just don’t see how they can get by,” McClure said.
At Videoport, a movie rental shop on Middle Street in Portland, manager Bill Duggan said his employees all earn more than the minimum wage – $9.50 an hour, the amount proposed by Mayor Brennan.
“How can you live in this town and earn less than $10 an hour?” Duggan asked.
He supports increasing the minimum wage for one reason.
“The people who are on top are raking in all the money, but we need to raise the people on the bottom up so they can spend more money in my store,” Duggan said.
A young man who was checking out movies Tuesday at Videoport said he is being paid $7.50 an hour at a downtown Portland business. He said he is being forced to live at home with his parents because he can’t afford to live on his own. He declined to identify himself out of fear that the corporation that owns his place of employment might reprimand him or fire him for speaking to the press.
A STRETCH FOR SMALL BUSINESSES
Some business owners, particularly in the restaurant industry, have criticized the idea of a higher city minimum wage, saying it would lead to price increases and limit their ability to give raises to employees who earn more than the minimum wage. Some have warned that a significant increase could make it difficult for Portland employers to compete with companies outside the city and would discourage employers from locating in Portland.
Greg Dugal, president of the Maine Restaurant Association and Maine Innkeepers Association, said increasing the city’s minimum wage could be difficult for small businesses that have small profit margins and simply can’t afford to pay workers more.
“The major concern is the city of Portland has decided to go off and do these things on their own. It should be something that is done at the federal level, or at the very least the state level, where you can create a level playing field for everyone involved,” Dugal said. “Ultimately, I don’t think it’s just a Portland issue.”
Eliza Townsend, executive director of the Maine Women’s Lobby and a member of the mayor’s advisory group, said she supports a minimum wage increase, particularly because the majority of minimum wage workers are women. As many as 75 percent of people who earn the tipped minimum wage – or half of the regular minimum wage – are women, she said.
“The discussion we’ve had as an advisory group is that Portland is a lovely community, but it would be really sad if the people who operate our businesses and make the place work aren’t able to live there as well,” Townsend said. “The levels we’ve discussed don’t necessarily close that gap, but will help people better meet their everyday needs.”
Brennan said he is leaning toward $9.50 an hour for the minimum wage next year because economists recommend that the minimum be 50 percent to 60 percent of the median wage in the city. That would put Portland’s minimum between $9.10 and $9.50 an hour, he said.
The plan to increase the wage in steps is seen as a way to minimize the impact on businesses. Brennan said many states and communities phase in the higher wages.
The federal minimum wage is $7.25 an hour.
Staff Writer Dennis Hoey contributed to this report.