New Analysis: $12 Minimum Wage Would Cost Maine At Least 3,800 Jobs
Women, Teens Would Bear Larger Share of Job Loss
Publication Date: March 2016
Topics: Minimum Wage
Washington D.C. — Today, the Employment Policies Institute (EPI) released a new analysis conducted by Drs. David Macpherson of Trinity University and William Even of Miami University examining the impact of Maine’s proposed minimum wage increase to $12 by 2020. Recently, labor union-backed minimum wage proponents qualified a question on November’s state ballot about whether to raise the state minimum wage by 60 percent to $12.
Following the Congressional Budget Office’s methodology used in a 2014 study which found that 500,000 jobs would be lost nationally from a $10.10 minimum wage, Drs. Macpherson and Even conclude that 3,832 jobs would be lost in Maine if a $12 minimum wage is adopted statewide. This estimate is conservative, as it does not account for the impact of a roughly 220 percent increase in the minimum wage for tipped employees that’s included in the initiative.
The wage hike would disproportionately impact women, who would lose 63 percent of these jobs (2,405). Young employees, who also are more likely to work in industries affected by the mandate (retail and food service), would also be disproportionately affected, making up nearly 50 percent of the jobs lost (1,878). (See table below.) The authors find that approximately 330 jobs would be lost at nonprofit organizations.
|MAINE JOB LOSS FROM A $12 MINIMUM WAGE BY GENDER|
Proponents of the wage hike claim that it would reduce poverty. In the words of the state AFL-CIO Executive Director Matt Schlobohm: “Working people deserve fair wages… they deserve better than poverty for full-time work.” But Drs. Macpherson and Even find that only six percent of those affected by a $12 minimum wage are single parents. By contrast, 56 percent of those affected by the wage hike either live with family, or are secondary earners in homes where both spouses work. (See table below.) Because so many minimum wage earners live in households where they’re either a second- or third-earner, the average family income of those affected by a $10.10 minimum wage is $57,316 per year.
|PERCENTAGE OF MAINE RESIDENTS AFFECTED BY A $12 MINIMUM WAGE BY FAMILY STATUS|
|Single Adult||Single Parent||Married Sole Earner||Married Dual Earner||Living With Family or Relative|
Read the full analysis here.
Mainers can see the impact of $12 in real-time in the evidence emerging from cities around the country that have enacted a minimum wage close to the $12 level. In March of 2015, Oakland raised its minimum wage by 36 percent, from $9 to $12.25 an hour. Shortly after the new wage took effect 10 grocery stores and restaurants in and around the city’s Chinatown district closed down, citing the new wage requirement as a factor. (Other stories can be found at FacesOf15.com). The impact of $12 would only be magnified in Maine: Adjusting for differences in wages and cost of living, even left-of-center economists who support a higher minimum wage have recommended a wage figure for Maine closer to $9.50.
“A $12 minimum wage in Maine would create even more barriers to employment for young jobseekers in the state,” said Michael Saltsman, research director at the Employment Policies Institute. “If Maine policymakers actually want to help the poor, they should expand the Earned Income Tax Credit, which supplements incomes without the unintended consequences of a wage hike.”