Bangor CoC offers realistic alternative to increasing the minimum wage

The Bangor Chamber of Commerce is combating the hard-left Maine People’s Alliance (MPA) with a more fundamentally sound procedure for increasing our state’s minimum wage, and the proposal they’ve discussed has the backing of many business leaders in Maine.

The Chamber’s business-friendly approach to increasing the minimum wage should suffice the needs of small business owners and low income workers, both of which are in need of a leg up in Maine.

A coalition including the Maine State Chamber of Commerce, the Maine Innkeepers Association, the Maine Restaurant Association and the Retail Association of Maine all seek to put a competing piece of legislation on the ballot for the November election that would make modest incremental changes to the state minimum wage. Maine’s current minimum wage is $7.50/hour.

The Bangor Chamber’s proposal would increase the state minimum to $10/hour by 2020. Starting with a $1 jump to $8.50/hour in 2017, the minimum wage would then grow by marginal 50 cent increments for the following years until becoming capped at $10/hour. Their plan does not include indexing minimum wage increases with inflation after 2020.

The MPA’s proposal, which gathered enough signatures before the Feb. 1 deadline to make it on the November ballot, would increase Maine’s minimum wage to $12/hour by 2020, and indexes future increases based on inflation.

Not only is the Bangor Chamber’s proposal more fiscally feasible for Maine businesses, it is much more comprehensive as well. The Chamber’s proposal would address the issues cited by restaurant owners and innkeepers, who are concerned of how destructive minimum wage hikes would be to their industries.

The Chamber’s plan features a “tip credit,” which would allow businesses to pay half of the state’s minimum wage to their tipped employees, similar to how they do now. It would also allow earned tips to count toward an employee’s total wage. However, if the combination of the two doesn’t equal the state’s minimum wage rate per hour, the employer must pay the remaining amount to ensure workers are still making the state minimum. Under this proposal, these industries could no longer pay only half the minimum wage to their tipped employees.

The Chamber’s proposal is much more realistic for small business owners. It would continue to permit businesses in these industries to pay less than the minimum wage to tipped workers, while simultaneously requiring them to ensure their employees earn the equivalent of the state minimum. The tradeoff is fair with this feature because the amount of money businesses with tipped workers will lose by a minimum wage increase would still be miniscule in comparison to how much they’d have to pay their lowest-ranking employees if the credit didn’t exist.

The MPA’s proposal does nothing to address this issue, and would be the most harmful to the small businesses of Maine. Instead, it outlandishly mandates all businesses to pay an increased wage to their lowest-skilled workers and indexes the minimum wage with inflation, practically guaranteeing this rate will grow in the future.

This method gives no stability to these industries, and the lack of a tip credit in their proposal would put people out of business. No restaurant in Maine could afford to increase their employees’ wages by more than $8 in less than four years. The MPA reminds blind to these simple facts.

Rep. Stacey Guerin, R-Glenburn, informed the Bangor Daily News that she plans to sponsor the Chamber’s plan in hopes that it will qualify to compete with the MPA’s proposal in November.

There is a plethora of ways that this could play out. The Maine Legislature could enact the MPA’s proposal, leave the measure entirely up to voters or place the plan and the competing proposal from the Bangor Chamber on the ballot together. If the legislature allows the proposals to compete, it will be the first time voters in Maine face competing ballot questions since 2003. Voters will have the option to approve either proposal or reject them both entirely.

What plays into the favor of the Bangor Chamber is that this isn’t the first time a chamber of commerce has stepped up to the plate and aggressively fought a minimum wage increase in Maine. The Portland Chamber of Commerce fought and succeeded last November, convincing voters in the liberal safe haven of Portland to reject a minimum wage increase that would have propelled the municipality’s minimum wage to $15/hour.

The radical left-wing organizations of Maine even made this proposal after the Portland City Council had already approved a wage hike to $10.10/hour in September of last year. The Portland Chamber created a PAC titled “Too Far, Too Fast” and ran television and radio ads against the legislation, ultimately defeating the proposal with 58 percent of the vote. That title is just as fitting to the MPA’s approach this election cycle.

MPA spokesman Mike Tipping told the BDN that the Bangor Chamber’s proposal is a “cynical attempt” to stop the MPA’s plan from reaching voters in November.

The humor is just how cynical it was for the MPA and the rest of Maine’s liberal sideshow to seek a minimum wage increase statewide in the first place.

When the MPA and other liberal outfits couldn’t shove a radically left-wing proposal down the throats of Portland voters, their immediate counter is to respond with an overreaching plan at the state level that is just as impractical as the one offered to Portland last year.

That, Mr. Tipping, is true cynicism.

Jacob Posik

About Jacob Posik

Jacob Posik, of Turner, is the editor of The Maine Wire, an online news and opinion service offered by the Maine Heritage Policy Center. His blog covers local and national political topics.