New Analysis Showcases Consequences of Maine’s Proposed $12 Minimum Wage
Economists find 3,800 jobs would be lost at $12, mostly at small businesses
Publication Date: September 2016
Washington D.C. – Today the Employment Policies Institute (EPI) released a new analysis conducted by economists at Trinity University and Miami University examining the consequences of Maine’s proposed 60 percent minimum wage increase to $12. The economists, Drs. David Macpherson and William Even, conclude that roughly 3,800 jobs would be lost in the state at $12, and that these job losses would be concentrated among the state’s small businesses. (This finding should be considered conservative because it does not take into account the proposed 220 percent increase in the minimum wage for tipped employees.)
Read the analysis here. Read EPI’s op-ed in yesterday’s Portland Press-Herald discussing the analysis here. EPI Research Director Michael Saltsman is speaking at an event addressing the proposal’s consequences in Portland tomorrow with the state chapter of the National Federation of Independent Businesses. RSVP here.
The economists arrive at their conclusion by following the methodology of the nonpartisan Congressional Budget Office (CBO), whose 2014 analysis of a $10.10 federal minimum wage found that 500,000 jobs would be lost nationally should it be implemented. They conclude that women and teens would bear the brunt of the job loss, accounting for roughly 63 percent and 50 percent of the jobs lost, respectively.
The analysis finds that over half of the employees affected by the proposal work at small businesses with fewer than 100 employees, and roughly 42 percent work in ones with fewer than 50 employees. This data runs contrary to proponents’ claims that big businesses would shoulder most of the burden of the higher minimum wage.
The analysis also questions proponents’ claims that the proposal would help the poor. The analysis finds that just six percent of those affected by the wage hike are single parents. By contrast, 56 percent either live with family, or are secondary earners where both spouses work. The average family income of those affected by the proposal is $57,300.
“A 60 percent increase in Maine’s starter wage would cost the state 3,800 jobs and disproportionately hurt local small businesses,” said Michael Saltsman, research director at EPI, “Maine voters who actually want to help the state’s poor should support an expansion of the state’s Earned Income Tax Credit, which helps the working poor without reducing job opportunities.”
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment. EPI receives support from restaurants, foundations, and individuals.