7 things you should know before voting on the $15 minimum wage
Next Tuesday Portland voters will decide whether to raise the city-wide minimum wage to $15 per hour. In conversations with friends and neighbors I’ve noticed some confusion about what the proposal would actually mean for local businesses— and how the ballot question relates to other recent proposals to boost the minimum. So let’s clear up a few things.
1. The $15 proposal is one of three relevant minimum wage proposals
The minimum wage is going up significantly next year regardless of next week’s election. That’s because the city council recently passed an ordinance (totally unrelated to the ballot question) that will raise the minimum wage to $10.10 in January and $10.68 in 2017.
The $15 ballot question, which was conceived before the city ordinance, would obviously go much higher. If you think $10.10 isn’t high enough, then you have a chance on Tuesday to override the city council.
But there’s another proposal that many people are viewing as a better alternative: A referendum question that’s slated to be on the statewide ballot in 2016 that would raise the entire state’s minimum wage to $12. Pretty much everyone agrees that a state-wide solution is best, but not everyone agrees that $12 is the right number.
2. This Proposal Would NOT Require Small Businesses to Suddenly Jack Up Wages to $15/Hour
This strikes me as extremely important, yet somehow it gets glossed over in most discussions of the referendum. The proposed law, if approved by voters, wouldn’t require the vast majority of businesses to pay $15 per hour until 2019. Businesses with fewer than 500 employees would see the increase phased in over 4 years. In 2016 those businesses would only have to pay $10 per hour — ten cents less than required by the city ordinance that already passed! And while the $15 minimum wage would come sooner for big businesses, they’d still have a full two years to get there.
When you take into account inflation and the more localized increases in cost of living, a four-year climb to $15 doesn’t seem quite so fast. And even in 2015, according to the Alliance for a Just Society, a living wage in Maine for a single adult with no children is $15.82 an hour.
3. The $15 proposal would give small businesses a competitive advantage
Right now it’s large corporations (Wal-Mart, McDonalds, etc.) that benefit most from a very low minimum wage. Small businesses committed to paying decent wages find themselves at a serious competitive disadvantage against such giants. That’s one reason many small businesses have higher prices than their corporate counterparts: They feel an obligation to pay the workers in their community fairly.
The $15 ordinance would turn that equation on its head — at least for four years. From 2016 through 2019 big businesses would be required to pay significantly more than small businesses, giving small businesses a boost and an opportunity to gain ground in an economic system that overwhelmingly favors big business.
4. The $15 Minimum Wage Could Spell Tough Times for Non-Profits and Social Service Providers
One clear downside of this proposal is that it could cause many non-profits and social service agencies that are severely underfunded to face even more dire financial struggles. A recent Press Herald article spelled out the implications. It would be tragic if a higher minimum wage make it harder for low-income residents to access much-needed help. And while many of the organizations affected fall under the 500-employee threshold, there are many other much larger groups providing critical services in Portland that would face the faster timeline in paying $15. Moreover, some organizations that provide social services in Portland are based in other cities, which means they’d likely go through the costly rigmarole of paying employees different wages based on whether they are within city limits when they are actually working.
On the other hand, supporters of the $15 minimum wage point out that there would be less need for social services if everyone were paid a fair wage. And Tom Macmillan, who helped spearhead the $15 proposal, told me that “some of the opposition from non-profits is from Maine Health, which, despite being a non-profit, pays a good number of employees, especially several administrators, over a million dollars per year.”
5. The Opposition is Flush with Cash
It’s important to know about the well-funded nature of the opposition campaign, because it means you’ll have to actually seek out pro-referendum perspectives. You’re not going find the pro-15 message conveyed through television ads and digital marketing like you will the anti-15 message. The folks behind the referendum, mostly members of the Maine Green Independent party, don’t have much money to spend. [UPDATE: A national group called the Patriotic Millionaires has actually started airing TV ads in Portland in support of a higher minimum wage; the ads don’t specifically address the $15 proposal, but they are making a strong case for bold action.]
6. This Chart is Essential to Understanding Why Wages Matter
If wages had kept pace with productivity for the last few decades a low-wage worker would likely be getting paid closer to $20 per hour than $15.
7. This Isn’t the Only Question One
The Question One that would raise the minimum wage is on the Portland ballot, but there’s also a Question One on the state-wide ballot. The state referendum would strengthen Maine’s unique public campaign-finance system, which is well worth supporting. If you think there’s too much money in politics, vote YES on the clean elections question so that ordinary Mainers can get the support they need to to run for office and compete with mainstream politicians funded by wealthy donors.
Just as big business interests generally oppose raising the minimum wage (first by fighting Portland’s $10.10 ordinance and now by fighting $15), some big business groups in Maine are also opposed to the clean elections initiative. The Maine Chamber of Commerce is leading the opposition to Question One on the state ballot because the proposal would end many of the tax breaks that benefit the large corporations the organization represents. The Maine Small Business Coalition, which is far more representative of Maine’s business community, supports YES on Question One.
P.S. This Proposal Would Give Tipped Workers a Raise Too…
The ordinance passed by the city does not raise the $3.75 minimum base wage that applies to the thousands of workers in Portland who rely on tips. The $15 proposal would raise the base wage for tipped workers significantly. It would be $3.75 below the minimum wage for everyone else.
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