The cost of low wages is paid over and over

If a person works eight hours a day, five days a week, 52 weeks a year, he or she should earn enough money to afford the basics.

Today, in Maine and most of the United States, it’s not even close.

For a single mother or father with one child, the poverty line is $15,510 per year. At Maine’s current minimum wage of $7.50, a full-time worker earns – before payroll taxes and any deductions, before any days missed or reduced hours – $15,600.

That’s just $1,300 a month to feed, clothe, house, transport and educate two people. Add a second child, and the household doesn’t stand an economic chance.

It’s not enough money, and it sets people up to fail.

Earlier this year, Democrats in the Legislature passed a bill that would have raised Maine’s minimum wage to $8 an hour in 2014 and eventually to $9 an hour in 2016.

As expected, Gov. Paul LePage this week vetoed the bill, and Republicans in the Legislature stood with him to keep the bill from becoming law.

They decided that Maine workers don’t deserve a raise.

There is no question that increasing the minimum wage carries a cost for employers.

For every dollar the minimum wage is increased, it means yearly wages for a full-time worker increase by $2,080.

Small businesses, already struggling to get by, would feel the pinch.

But it’s not just a pinch for families trying to make ends meet on such a meager sum. It’s an impossibility.

The National Employment Law Project, an advocacy organization that supports increasing the minimum wage, found that between 2009 and 2012, the real median wage for all occupations declined by 2.8 percent, even as productivity increased by 4.5 percent.

People are working harder and longer, and their dollars are buying less and less.

As the AFL-CIO’s Richard Trumka and NELP’s Christine Owens wrote for Reuters, “If the minimum wage had just kept pace with inflation since 1969, it would be around $10.70 today. If it had kept up with productivity growth, it would be $18.72.”

According to the Maine Center for Economic Policy, increasing the minimum wage to $8.50 would directly affect 84,000 Mainers or about 15 percent of the state’s workforce.

A small raise – to people who would spend it almost immediately on necessities – would also be good for the economy, without raising unemployment rates.

In February, the Center for Economic and Policy Research found, after a review of much data, that: “The employment effect of the minimum wage is one of the most studied topics in all of economics. … The weight of that evidence points to little or no employment response to modest increases in the minimum wage.”

The business community largely opposed an increase in the minimum wage, as it has every time the issue has surfaced. The Maine State Chamber of Commerce, the Maine Innkeepers Association and the Maine Restaurant Association led the lobbying effort.

And there’s no question that the some of the impacts they described are real.

For example, the Maine Restaurant Association told the Legislature that an increase in the minimum wage would impact 70 percent or more of the employees in the industry.

In Maine, tipped service employees, such as waiters and waitresses can be paid as little as $3.75 an hour – half of the minimum wage – as long as their tips eventually add up to at least an hourly wage of $7.50.

It’s a system that is prone to abuse, misuse and misunderstanding by customers and employees alike. I’m not sure everyone realizes that the waiter at the restaurant depends on tips to make up the difference from a subpar minimum wage, that they often have to split their tips with a number of other staffers, including bussers and bartenders, and that the rules on how tips are divided aren’t usually up to them.

At a high-end restaurant, staff can do OK. But on a $6 breakfast, it’s hard to make a living on $3.75 an hour and $1.20 tips split several ways.

The paid minimum wage was $3.35 an hour at my first job off the farm, when I was just old enough to get a permit to work.

Along side me in the grocery store were men and women who were trying to support their families one shift at a time on that same wage.

I don’t know how they did it. And when I look around today, with costs up and buying power down, I still don’t know how folks manage.

But I do know this: There is a limit to how much working families can bear, how long they can go without health insurance or a safe place to live. There are limits, and the costs for pushing people too far for too long are much higher than 50 extra cents an hour.

We’re already paying the price with falling standards of living, a sluggish economy, kids who get to school but aren’t ready to learn, an elderly population without savings. The cost of low wages gets paid over and over again.

Pay now. Or pay later with interest. That’s really the choice we’re making.

David Farmer

About David Farmer

David Farmer is a political and media consultant in Portland, where he lives with his wife and two children. He was senior adviser to Democrat Mike Michaud’s campaign for governor and a longtime journalist. You can reach him at