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Maine Bill to Hike Minimum Wage Sparks Debate in Augusta
03/14/2013   Reported By: Jay Field

Around 60 percent of the jobs lost since 2007 have been middle-income positions, according to the National Employment Law Project. But as more and more people go back to work, it's lower wage jobs they're returning to. Some Democrats in the Legislature say its time to confront this downward pressure on worker pay. They're sponsoring a bill that would raise Maine's minumum wage. But Republicans and many business owners say doing so would blunt job growth and hurt the economic recovery. Jay Field reports.

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Paul Nickerson, who's from Lewiston, got his first manufacturing job right out of high school. "The year was 1997. My starting wage was $7.90 an hour - a little over the federal minimum wage at that time."

As the years passed, Nickerson got promoted - all the way up to shift supervisor. His wages rose to more than $18 an hour. But in 2008, Nickerson got sideswiped by the Great Recession. He lost his job, when his company went out of business.

It took him six months to find another one "that was way below my skill level as a warehouse worker. I was paid $14 an hour, which was still livable. Six months into this job, I was informed that my services were no longer needed and that the company needed to save money."

This time, the job search took eight months. Nickerson took a position below his skill level, as a packager, making $11 an hour. Six months later, he was laid off again.

"In 2012, I actually found a job that matched my skill set: a lead man position with many responsibilities in the day to day operations of production. My pay rate is now $9.75 an hour and there's nothing I can do about it. Companies are using the excuse of a bad economy as a reason for paying unfairly low wages. You simply can not support a family on minimum wage."

According to data from the National Employment Law Project, 58 percent of the jobs added since 2010 are low-wage positions, paying $13.83 an hour, or less. This downward trend has Democrats across the country calling for an increase in the minimum wage. President Obama wants to raise the federal minimum wage to $9 an hour. A bill before the Legislature in Augusta would raise Maine's to $8.50 from the current $7.50.

"Good afternoon. You're going to hear from another restaurant. My name is Todd Moore and I own King Eider's Pub in Damariscotta. Does it make sense to Maine business, is my real question. And I say, 'no.'"

Moore was one of several restauranteurs who testified against the minimum wage hike at a hearing Thursday before the Legislature's Labor, Commerce, Research and Economic Development Committee. Moore says if the bill passes, he'll be forced to give a raise to tipped wait staff, who he says already make between $17 and $22 an hour.

"The cost to my company, using the same hours of last year, are going to be $13,911.00," Moore said.

Some economists believe raising the minimum wage is a bad idea all the way around - one that would increase operating costs for businesses and ultimately force them to cut jobs and hire fewer people. Other economists, though, say any job losses would be minimal and would be offset by the wage boost that millions of low income workers would enjoy. Rep. Jeffrey Evangelos, a Friendship independent, is co-sponsoring LD 611.

"Capitalism to succeed has to be sustainable. It has to work for everybody," Evangelos said. "Workers who make a decent wage will go out and spend money at your store."

Evangelos made this observation during a pointed exhange with a Republican on the committee. A study, noted Rep. Brian Duprey of Hampden, shows that low-wage workers in Maine get about $100 a day in various forms of government assistance and wouldn't want to risk losing that support for a $12-an-hour job.

To which Evangelos asked, "Why should government welfare supplant the responsibility of corporations to pay a livable wage?"


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