Maine’s minimum wage will increase to $14.15 per hour on January 1, 2024, according to recent inflation data released by the US Bureau of Labor Statistics (BLS). For workers receiving tips, the employer’s minimum wage will be $7.08 per hour, as long as the employee receives enough tips to add up to the full $14.15 per hour. Maine Center for Economic Policy estimates the wages of 127,000 Mainers will rise as a result1, including people below and slightly above the new minimum.
On September 13, the US BLS reported the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region increased by 2.4 percent between August 2022 and August 2023. According to Maine’s minimum wage law, passed by voters in 2016, Maine’s minimum wage is adjusted by this amount each year to reflect increased cost of living. This indexing of the minimum wage to inflation ensures workers on low wages do not fall behind over time. By contrast, the federal minimum wage was last increased in 2009 and is just $7.25 per hour. Over the 14 years since it was updated, it has lost approximately a third of its purchasing power to inflation.
Of the Mainers who will see a wage increase from the new minimum wage, 68,000 “directly impacted” workers currently earn less than the new rate of $14.15 per hour and their employers will increase their hourly rate to comply with the law. Another 59,000 “indirectly impacted” workers earn just above the new rate, and their employers will likely bump up their hourly rate by a smaller amount to maintain a competitive advantage in hiring and retaining workers.
The number of workers impacted — around one in five payroll employees in the state — is smaller than previous years because Maine’s stronger labor market has helped push wages up for more workers. When the 2016 referendum was passed, MECEP estimated the change benefitted as many as one in three employees in Maine at the time of its implementation. Still, the fact that 127,000 Mainers are benefitting from this year’s increase is a sign the policy is working as intended while the harmful impacts predicted by opponents — namely higher unemployment — have not borne out in practice. Six years after the initial implementation of the policy, Maine’s unemployment rate remains below the nation’s and is at near historic lows.
The state legislature is still considering several proposals related to the minimum wage. The Labor and Housing Committee voted to increase the wage to $15 per hour in 2024 but this proposal did not advance to the full legislature. Another proposal, which would make farm workers eligible for the state’s minimum wage for the first time, was vetoed by Governor Mills. A stakeholder group that includes a representative from MECEP is working on replacement legislation to be introduced in 2024.
Notes:
[1] MECEP analysis of the US Census Bureau, Current Population Survey, Outgoing Rotation Group data from August 2022-July 2023 via the Integrated Public Use Microdata System (IPUMS). “Indirectly impacted” workers include those with hourly earnings between $14.16 and $16.27 per hour (15 percent above the new minimum).
