AUGUSTA, Maine — Roughly 59,000 Mainers will receive a direct wage increase on New Year’s Day as Maine’s minimum wage grows to $10 per hour, a $1 hourly increase over last year.
The federal minimum wage has not increased since 2009 and the purchasing power of the minimum wage has steadily declined for decades. Meanwhile, states have recognized the need to raise wages to promote economic security for low-wage workers and their families.
Maine is one of 18 states, including three in New England, raising wages in January. The 59,000 Mainers receiving a direct raise in the new year represent roughly one out of every 10 workers in the state. Their raises will amount to an overall direct wage increase of $79.6 million in 2018, according to an analysis by the nonprofit Economic Policy Institute. That makes for a roughly $1,349 annual pay increase for each minimum wage worker in the state.
“A strong minimum wage protects families from poverty and forms the foundation of a fair, thriving economy,” said MECEP Policy Analyst Sarah Austin. “Raising the minimum wage doesn’t just provide greater economic security for Maine workers; It boosts Maine’s economy as well. The new year’s increase will provide families with additional means to buy groceries, pay for their children’s health care, and spend at local businesses.”
The minimum wage increase will provide direct economic relief to Mainers at the bottom of the income distribution scale. However, its benefits aren’t limited to those who earn the minimum wage. Other low-income Mainers will see their salaries increase as a result of the well-documented “spillover effect,” in which employers raise salaries for other workers as pay scales are adjusted to reflect the new wage floor set at the state level.
This is the second January in a row that low-income Mainers will have received a raise as a result of a voter-approved minimum wage law enacted at the ballot box in 2016. The new law increased the minimum wage from $7.50 to $9.00 an hour in 2017, and will continue to increase the minimum wage by a dollar each year until it reaches $12 in 2020. Thereafter, the minimum wage will be indexed to inflation, providing regular cost-of-living increases to low-wage Mainers.
The minimum wage law approved by voters would also have gradually eliminated the subminimum wage allowed for tipped workers, which allows employers to pay tipped employees only half the minimum wage, as long as tips make up the difference.
However, the Legislature repealed the portion of the law that raised tipped workers’ wages — effectively blocking 24,000 Maine workers from receiving the full benefit of the minimum wage increase. Tipped workers in Maine are overwhelmingly women, and are more than twice as likely to live in poverty than the workforce as a whole.
