Fight back against rising inequality: Raise Maine’s minimum wage

Fight back against rising inequality: Raise Maine’s minimum wage

Good news for Maine: The minimum wage referendum will officially be on the ballot this November! Maine voters will have a chance to weigh in on one of the most important economic questions of our time. In this heated presidential campaign season where “the 1%” is a rallying cry, the minimum wage issue cuts to the heart of what’s wrong with our economic system and how to fix it.

No one can turn on a television, radio or computer these days without hearing about wealth inequality. And for good reason. The top 20% own 90% of the wealth. These are people earning over $500,000 a year. The lowest 20% of the American population isn’t even on the pie chart because their net worth is negative.

Those numbers are sobering, but what do they actually mean for the economy and the real human beings that inhabit it? Basically, the wealth generated by our economy, and by everyone working in it from CEOs down to the person ringing up your groceries, has slowly been shifted away from the working class and upwards towards the upper managerial and owner classes. While the amount of wealth has steadily risen, the share of working people has steadily declined, to the point that a job is no longer any guarantee of material safety. In fact, most of the families that rely on public assistance have at least one family member working full time. At the same time, the wealth of upper management and owners has increased to grotesque proportions.

This is not only outrageous and unfair, but also fiscally irresponsible. First of all, paying workers so little that they need public assistance to get by is essentially private companies shifting their labor expenses to the public in order to raise their profits, upper management salaries, and investor dividends. We, the taxpayers (including low wage workers), have to make up the difference in public assistance so workers can eat. Second, any economist worth the title understands that for an economy to work, people have to have money to spend on goods and services. And it is the working and middle classes that spend money, when they have it. The already-wealthy tend to put money in bank accounts, where it benefits no one but themselves and their heirs.

Luckily, Maine now has a shot to do the fair thing, and the smart thing, this November. The minimum wage in Maine currently stands at an abysmal $7.50 an hour. No one can make ends meet on that kind of poverty wage. The minimum wage for tipped workers is an unbelievable $3.75 an hour, and if you think that is made up for in tips, think again. Tipped workers are among the lowest paid workers in our economy, even when tips are factored in. Maine needs a raise, and badly.

The proposal that will be on the Maine ballot in November is carefully crafted to occur gradually, giving businesses plenty of time to adjust. It will raise the wage to $9.00 an hour in 2017, and then $1 a year until 2020, when it reaches $12 an hour. Thereafter it will increase with the cost-of-living, ensuring that it always remains a more fair wage, immune to the whims of politicians and lobbyists. The tipped worker wage will also rise $1 a year until it is equal with the regular wage, ending once and for all this unfair system that forces customers to pay the labor costs of the hospitality industry, and leaves tipped employees vulnerable to the whims of customers for their sustenance.

While the case for raising the minimum wage is pretty clear cut when you know the facts, we should get ready for the onslaught of distortions and lies from the folks who don’t want this to happen: the 1% and their front groups. Spinning themselves as representing mom-and-pop Main Street businesses, these groups actually represent big business and the uber-wealthy, and will fight tooth and nail to hold onto every cent of the outrageous wealth they have amassed by keeping working Mainers from making a dignified living. They are apparently already considering coming up with an alternate minimum wage proposal in the legislature (despite opposing even a 25-cent increase just last year) as a smokescreen to protect their interests and distract us from the real solution.

In addition to trotting out false alternatives, their main weapon will be fear. They will try to frighten workers by raising the spectre of layoffs. They will try to frighten consumers by threatening price increases. They will try to frighten businesses with the threat of unmanageable labor costs.

Don’t be fooled by these threats. There is absolutely no evidence that reasonable wage increases like the one proposed result in job losses or business closings. While labor costs will increase gradually, the majority of businesses paying poverty wages are the largest employers, with the biggest margins. The vast majority of small businesses in Maine – 77% – actually have no employees and will not be affected at all. Those small businesses that do have employees generally pay them more than the minimum wage, and more than larger businesses, and will benefit from those larger businesses being forced to do right by their employees in the same way that most Maine small business owners already do.

Prices will not increase. Businesses need to remain competitive. If they can cut costs elsewhere rather than passing the cost on to the consumer, and endangering their market share, they will do so. But best of all, when working people have more money, they spend it. Working people have many needs and desires that go unmet in the current economy because they simply can’t afford it. Put some money in their pockets and you unleash a powerful surge of demand that will boost our economy and fuel small businesses. Businesses that are making money hire more workers. That’s why so many Maine small businesses have already come out in favor of this initiative.

Maine needs an economy that works for all of us. The simple truth is, we all do better when we all do better. Well, at least 99% of us.

About author

April Thibodeau
April Thibodeau 11 posts

April Thibodeau majored in Political Science at the University of Maine and has experience in law, non-profit work and political advocacy. She lives on Westport Island with her husband and two cats and enjoys gardening, homesteading and rural life.

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