Corporate lobbyists make major math error, have accidentally been arguing for $12 minimum wage

Corporate lobbyists make major math error, have accidentally been arguing for $12 minimum wage

If you’re going to use research to advocate for a lower minimum wage, you better check your sources and your math.

That’s what a coalition of corporate lobbyists learned in Maine today, as Professor Michael Reich, the academic expert they had cited to justify a competing measure to undermine the citizen initiative to increase Maine’s minimum wage, revealed that the lobbyists had made a basic error in their arithmetic and that their economic claims in favor of a $10 per hour minimum wage by 2020 actually supported the referendum’s target of $12 per hour.

“Your statements cite a 60 percent ratio of minimum wages to median wages as the point where the net economic benefit is largely positive to both workers and business owners. This ratio, however, should be computed using the median full-time workers’ hourly pay in the year when the proposal is fully implemented,” wrote Reich, a professor at the Institute for Research on Labor and Employment (IRLE) at the University of California, in a cease-and-desist letter sent to the Maine Restaurant Association and Maine State Chamber of Commerce. “Based on current standard (CBO) forecasts of wage inflation, this figure will rise to $21.23 in 2020. A $10 minimum wage in 2020 would thus equal 47 percent of the full-time median wage– not 60 percent as your statements claim. A $12 minimum wage would equal 57 percent of the median wage– below the 60 percent threshold. Your arguments for a $10 per hour minimum wage by 2020 thus more appropriately apply to a $12 per hour minimum wage.”

At least a dozen times, in press releases, public statements, emails to their memberships and correspondence with legislators, lobbyists supporting a competing measure have cited research from IRLE as the sole scientific justification for their support of a $10 minimum wage by 2020. In a press release sent by the business groups announcing the proposal, it is cited as the answer to the question “Why did the coalition choose $10 as the proposed minimum wage for Maine?”

“I am a single mother and I know what it’s like to work low wage jobs and not be able to make ends meet. That’s why I and many other Mainers with similar stories worked hard for months to gather 75,000 signatures to place a minimum wage increase on the ballot,” said Melissa Stevens, a volunteer with Mainers for Fair Wages from Lewiston speaking at a press conference in Augusta. “I look forward to the lobbyist group admitting their mistake, making the public corrections that Professor Reich has requested and dropping their competing measure.”

Reich serves as chair of IRLE’s Center on Wage and Employment Dynamics. He has written more than 130 published scholarly papers and 17 books and monographs on economics, with his most prominent work focusing on the economic effects of the minimum wage and other workforce mandates. He holds a Ph.D. in Economics from Harvard University.

“The corporate lobby should acknowledge the findings of their own experts and take the evidence-based approach that they have claimed to support. They should tell their members, legislators and the public that they made a mistake and then they should join us in supporting a $12 minimum wage,” said Brandy Staples of Phippsburg, who works three low-wage jobs and gathered more than 600 signatures to place the citizens’ initiative on the ballot. “It simply wouldn’t be credible for them to claim that 60% of the median wage is ‘the magic number’ that they support one day and then oppose that same number the next. It’s time for them to drop the competing measure proposal and do what’s right for their businesses and for thousands of Maine workers who are working hard at difficult jobs and struggling to make ends meet.”

Photo: Melissa Stevens speaks at a State House press conference.

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