This proposal will appear as Question 4 on the ballot in November. It will propose an increase to $9.00 per hour in 2017 and an annual increase of one dollar an hour each year until 2020 for a wage of $12 per hour. It is also proposes that this wage will increase incrementally with the CPI (consumer price index) on a permanent basis. I encourage you to consider both the individuals affected and the businesses that will bear this additional expense. Keep in mind that several powerful progressive forces are pressing very hard for adoption of this proposal such as the Missouri based group, the Fairness Project. To date they have provided $163,000, the largest dollar amount of money from out of state influences. In state, the Maine Peoples Alliance has currently spent $342,709 of the $388,137 total they have raised.

How this will affect our economy, if this initiative is passed is an important consideration as we currently have an unemployment rate of 3.5%. This is one of the very lowest in the nation and it makes sense not only to keep this trajectory in place or make it even better. Before we proceed further, let’s examine the fiasco that has happened in the liberal bastion of Seattle as they rushed to embrace a $15 minimum wage. The city did not bargain for what happened to other workers that sought help. Although workers were earning more, fewer of them had a job than would have happened without an increase. Those who did work had fewer hours than they would have without the wage hike. Economists have found that the minimum wage hike to $15 per hour that sounded so generous when passed by the city officials resulted in somewhere between a $5.54 a week raise increase to a $5.22 a week reduction in pay.

This is lesson one of Economics 101: increasing the minimum wage increases the costs of hiring workers, and employers must either accept reduced margins or customers must pay steeper prices. If employers cannot stay in business while paying their staff more, they will have to employ fewer individuals or give their employees fewer hours. It is unfortunate but inevitable that this results in the fact that the wages per hour may increase but worker’s total earnings stay the same or decline. Another unanticipated result is the proposed higher minimum wage has the most negative effect on those with little education or training skills, such as minorities, the young, or the most recent arrivals in our country.

It is estimated that there are approximately 12,000 individuals currently employed making the current minimum wage in Maine. Over 55 percent of these are living at home or are second or third money providers. However, if the increase as proposed in this initiative becomes law as many 115,000 hourly workers may be affected.

This is due to the fact that most businesses cannot offset wage increases by raising prices. Both the Restaurant and the Innkeepers Associations have vigorously opposed this referendum as it would be detrimental to their enterprises. Maine’s economy thrives today on its array of successful small businesses many of which cater to vacationers. Currently, of the states private sector workforce of 278,957, approximately 60 percent is employed in the small business sector.

There is also another consideration that is very often overlooked in considering raising the minimum wage and that it is how other employees are affected that do not make the minimum but whose wages are only at the proposed level of increase or slightly above them. These workers would also press for an increase, which in turn would place further pressures on employers. If this measure is passed particularly with the permanent basis of incremental increases predicated on CPI increases, it would be a disaster as many businesses would be forced to cut back on their workforce to survive. The nonpartisan Congressional Budget Office has projected that a minimum wage increase to $9 per hour would create job losses of 100,000, a $ 10.10 hour increase would create job losses of 500,000 and a $12 increase would create job losses of 700,000.

I am hopeful that the majority of individuals who take the time to read this will talk to friends and neighbors and explain to them the facts to defeat this proposed increase. Please remember that neither Pres. Obama nor Hillary Clinton has ever had the opportunity to sign payroll checks for employees. The inclusion of the increase to $15 per hour in the Democrat platform simply indicates their lack of comprehension of what it takes to operate a business in the private sector. Acting in an emotional manner to rhetoric from progressive influences to support this measure would be devastating to the Maine economy.

———

Another View is written on a rotating basis by a member of a group of Midcoast citizens that meet to discuss issues they think are of public interest.