PORTLAND, Maine (NEWS CENTER) -- Maine voters are being asked to make a big increase in the state minimum wage -- the first in eight years. Supporters say it's overdue, and that low-income Mainers deserve a "livable wage". But opponents say Question 4 goes too far, and that the increase would hurt businesses and cost consumers money.
The referendum would raise the current $7.50 per hour minimum wage to $12 over the next four years.It would also eliminate the "tip credit" for workers who receive tips, and index the minimum wage so it would automatically increase along with the inflation rate.
Supporters, like campaign spokesman Mike Tipping, say the current minimum is not enough money to live on. He says raising the wage would put more money into workers' pockets, and "the money would be spent locally, in Maine small businesses."
Tipping says many Maine businesses already pay well alive minimum wage, but argued that many of the national chains pay lower wages.
Tipping also told NEWS CENTER raising the minimum wage would actually help workers earning more than $12, because businesses would raise their wages to keep them above the minimum.
A leading business owner agreed.
Harold "Ham" Marden, whose family owns the popular surplus and salvage store chain, said he also thinks the wage increase would affect much more than just those on the lower end. But Marden also argued that raising the wage to $12 would put his business and many others at a competitive disadvantage, driving up labor costs and forcing many businesses to raise prices or reduce the workforce. Tipping, however, said national studies show other minimum wage hikes have not caused price increases or business problems.
Perhaps the greatest criticism of the proposal has come from the restaurant industry, which says eliminating the tip credit would have a severe impact on many restaurants, more than tripling their labor costs. Under current law, tipped workers are paid half the minimum, or $3.75 per hour, and make up the rest with tips. Question 4 would phase the tip credit out over 7 years, so that servers, bartenders, and busboys would wind up earning the full $12 dollar minimum.
Restaurant owners say they would be faced with dramatically higher labor costs, forcing them to raise prices of cut jobs. But supporters, including some others in the restaurant business, say the fears are not justified, and that some restaurants already pay well above minimum and are able to remain in business.
The Maine Department of Labor says that in 2015, an average of 14,500 Mainers earned minimum wage or less, and that about half of them were in the restaurant industry. The DOL also says 121,000 people earned under $12 per hour, meaning that many people would see a pay raise by 2020.