December 10, 2013

OUR VIEW: Low-wage workers should be higher state priority

As hourly pay stagnates, profitable companies are benefiting from government spending.

The Black Friday protests that accompanied the recent kickoff of the holiday shopping season put Walmart in the spotlight. Media coverage of the demands for better wages at Walmart might lead consumers to think that the chain is ground zero of the issue, but the nation’s largest private employer is only the most egregious example.

Instead, what’s at stake is the ability of millions of workers to make ends meet. Whether Americans can support themselves and their families is being compromised by a proliferation of low-wage service-sector jobs. Since the end of the Great Recession, the share of U.S. jobs paying below the $15.18-per-hour living wage threshold has risen to 39 percent, forcing many to turn to public assistance. Meanwhile, their employers — including Walmart and other large corporations — are getting state tax subsidies.

That’s why we should invest in helping the working poor and boost Mainers’ base hourly pay, which would improve their purchasing power and economic stability.

Opponents invariably predict that raising the minimum wage will discourage employers from hiring, but recent research has found otherwise. Following a 10 percent wage increase, for example, the cost of a $3 hamburger can be expected to rise — but by only a few cents, which can be passed on to customers without large reductions in demand or jobs. What’s more, if fast-food chains, big-box stores and other companies with a lot of low-wage workers have to pay a higher wage, more of their workers will stay with their jobs longer. This reduction in turnover doesn’t kill jobs; it boosts job stability. The lower amount spent on hiring and training new employees helps offset the cost of the pay increase.

Last spring, Gov. Paul LePage vetoed a bill passed by the Legislature that would have raised the state’s minimum wage from $7.50 to $9 per hour by 2016. Though no similar bills are on the table for the next legislative session, anyone concerned about the well-being of the working poor shouldn’t let the idea drop.

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