Mainers should react to the minimum wage increase with patience. As negative reports pop up, we can look to other states to see how this affects an economy. Twenty-one states are raising wages, so we are not alone. Seattle is at $13 an hour and has been in the news. Early last year business publications cheered reports of employment decreases yet reports later in the year revealed that there has been little effect, and though companies closed even more new companies opened.
Our economy will have to make adjustments because labor costs are a pricing factor. Some companies will initially cut back on employee hours somewhat as they wait to see if they can raise their prices. Those that cannot may eventually close. It is the opposite of all the lost Maine companies that could not lower their prices after the arrival of big-box stores and national food chains. Community leaders know that a new Walmart, Taco Bell, and others will result in closed local companies and a net loss of jobs, yet welcome them with open arms. It’s OK for big companies to extract wealth from our communities, for us to fatten up CEOs, but wrong for Maine citizens to demand a fair share of the income.
Results will take time. Employees must pay off debts and past due bills before having the cash to buy “extra” things. If all that increase goes to out of state companies economic growth will be slow. If Mainers learn to spend locally the growth will come faster because that money recirculates with new cash injected every paycheck. This is how we can build community wealth and reduce poverty. Mainers can no longer wait for industry and government to repair our economy.