A case for altering minimum wage increase

As we look forward to the New Year, we think of those who are struggling to get by. Unfortunately, their struggle is about to get worse.
Maine needs to attract more jobs, more families and more opportunity. Raising the minimum wage too high, too fast will make it much harder to do that.
Increasing low wages sounds like a good idea on the face of it. But the economic devil is in the details. A couple of sentences on a ballot do not explain the details of the law that regulates the wage hike.
If the question asked voters to slash the pay of their favorite waitress, they would have said ‘no.’ If the question asked voters to force the elderly to pay higher prices on everything they buy, they would have said ‘no.’
And if the question asked voters if they want their friends laid off because employers could not absorb the increase in the minimum wage, they would have said ‘no.’
Most voters didn’t realize the minimum wage would automatically go up every year, even during a downturn in the economy. They didn’t know that with inflation or hyperinflation, the minimum wage could jump to $20. It would put virtually every Maine company in jeopardy.
The socialists at Maine People’s Alliance basically made up their own indexing to downplay the effect of the automatic increase in the minimum wage. The cost-of-living increases in Social Security are based on the national Consumer Price Index.
But Maine People’s Alliance used the Northeast region’s CPI to increase the minimum wage at a much higher rate than Social Security. This will hurt 325,000 Mainers on fixed incomes who can’t afford to pay higher prices on anything they buy.
Voters didn’t realize most Maine businesses cannot afford these huge increases in labor costs. Black Mountain was forced to raise the price of lift tickets to cover their new labor costs. And the cost of milk is already going up. In response to efforts around the country to raise the minimum wage, McDonald’s will replace workers with self-service kiosks. Even businesses in California, which is a very wealthy state, can’t absorb their higher minimum wage. Businesses in California that closed because of these new labor costs include a bookstore, a pub, restaurants and bakeries, a coffee shop, grocery stores and clothing manufacturers.
Maine is not California. We have a fragile economy, and this new minimum wage could destroy it. I will not purposely harm the economy. I am asking the Legislature to work with me to do no harm.
We must fix the law to make sure it does not harm our elderly, our workers and our small businesses. We can honor the will of the people to raise the minimum wage, but slow it down to give businesses time to absorb it. We can eliminate the annual increase, just as we got rid of the automatic increase in the gas tax. And we can restore the tip credit so restaurant servers can continue to make $20 to $30 an hour.
The people have spoken. Now it’s the Legislature’s duty to make sure the law does not ruin our economy. Again, do no harm.
Paul LePage is Governor of the State of Maine now serving his second term in office.