Since 2016, increases to Maine’s minimum wage have contributed to lower child poverty rates, put more money into Mainer’s pockets, and made our economy stronger for everyone. Most lawmakers on Maine’s Labor and Housing Committee voted recently to build on this success by increasing the state’s minimum wage to $15 per hour next year.
The proposed increase to $15 per hour in 2024 will raise the earnings of almost 127,000 hourly employees. This will result in $74 million more in wage earnings compared to Maine’s current minimum wage law that was approved by voters in 2016 and includes cost-of-living adjustments. That means tens of thousands of workers with low wages will have an opportunity to not just keep up with rising costs, but to actually get slightly ahead.
Democrats amended a bill, LD 1376, which originally proposed increasing the state’s minimum wage to $24 per hour over 10 years to increase the statewide minimum wage to $15 per hour in 2024 and continue indexing it to inflation thereafter. Republicans voted against this proposal and instead voted to weaken Maine’s wage standards and undercut efforts to boost wages at a municipal level. This included votes to end cost-of-living adjustments, override local minimum wage ordinances in Portland and Rockland, and create a substantially lower minimum wage for teen workers.
The impact of the $15 per hour proposal will depend on how much the current minimum wage of $13.80 per hour would increase at the end of this year due to cost-of-living adjustments. This amount will be based on the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers in the Northeast region between August 2022 and August 2023.
The increase in prices for these workers in this region between March 2022 and March 2023 was 3.8 percent. If this were the annual rate of inflation in August 2023, the state’s minimum wage would rise to $14.40 per hour in 2024 under current law.
Increasing that amount to $15 an hour would impact 34,000 hourly workers directly — those who are projected to make less than $15 per hour in 2024 — plus an additional 93,000 workers who are projected to make slightly above the new minimum wage.1 On average, these workers would earn an additional $584 per year, for a total of $74 million in total additional earnings (see Table 1).
The minimum wage increase would be particularly beneficial to women, young Mainers, and people working in retail and hospitality (see Tables 2 and 3). The disproportionate impact on women is a result of pay disparities and the undervaluing of work historically done by women, especially cooking, cleaning, and care work. The dataset used for this analysis is too small to analyze the racial impact, but previous minimum wage increases have generally helped Black, Latino, and Indigenous Mainers in particular. The impact on young adults is larger than MECEP has found for previous wage increases and may reflect the current tightness in the labor market, which is giving younger people (whose employment levels are higher than in recent years) more opportunities to work.
If the legislature passes the amended version of LD 1376, it would be the first time Maine has increased the state’s minimum wage since 2009 (the current law was approved by citizen’s initiative in 2016). Though a relatively modest increase to the hourly rate, this would nonetheless represent a meaningful increase to workers’ paychecks and help many working Mainers who continue to struggle to make ends meet.
Notes:
[1] MECEP used data from the Current Population Survey’s Outgoing Rotation Group between February 2022 and February 2023 for its estimates. Starting with the hourly wages reported in the survey, these numbers were increased to reflect a $14.40 minimum wage in 2024. Directly impacted workers were those projected to earn below $15 per hour in 2024. Indirectly impacted workers were those earning less than $17.20 per hour. Directly-impacted workers were assigned a wage increase of 60 cents per hour, while those in tipped occupations were assigned an increase of 30 cents per hour (as the tipped minimum wage is half the regular minimum wage in Maine). Indirectly-impacted workers experience a smaller wage increase. MECEP followed the calculations laid out by the Economic Policy Institute. For more information see https://www.epi.org/publication/minimum-wage-simulation-model-technical-methodology/
