The minimum wage has been a pressing topic in Maine recently with the state Legislature considering rolling back future minimum wage increases. And while it may be hard to argue against giving raises to hard-working employees, there is a much more effective way to increase wages rather than mandating it: Tax cuts.

Proponents of raising the minimum wage fail to understand that higher minimum wage mandates bring unintended consequences. By increasing labor costs via policy changes, these mandates force job creators of all types to reduce employees’ hours, cut back staff, and even permanently close their businesses.

A bill now before the Legislature would help stop that from happening in Maine. It would lower the minimum wage from $10 per hour to $9 per hour, and cut the annual increases from $1 per hour to 50 cents, topping out at $11 per hour in 2021 and removing a provision that provides annual cost-of-living adjustments that was put in place as part of a 2016 referendum. The bill also creates a training wage for young adults and workers under 18.

Just look at the empirical evidence. When California’s minimum wage rises again to $15 an hour in 2022, economists predict the Golden State will lose roughly 400,000 jobs, as industries with the lowest-paid employees are especially affected. And Seattle has already begun to feel the effects of their higher minimum wage with slashes in pay and reduced hours for many employees who never asked for a reduction in their hours.

Minimum wage increases in Maine have already had severe impacts on small businesses. A family-owned restaurant, Dee’s Diner in Lebanon, could no longer stay afloat following the increase in the minimum wage. Dee’s owner originally tried to cut back hours for his staff to reduce labor costs, but it just wasn’t enough, and Dee’s officially closed this past September.

Rather than listen to labor groups backing the minimum wage, whose ideas are only hurting the people they’re claiming to advocate for, legislators should look to the hundreds of businesses who have already voluntarily increased employee pay due to their tax savings from the recently passed Republican tax bill.

Job creators know better than legislators what works best for their business, and more than 400 business owners have proven that tax cuts are the best way to incentivize job creators to increase their employees’ pay.

Americans for Tax Reform has compiled a list of companies who have announced increased employee benefits and higher wages since passage of the Republican tax cuts. The list goes on for many pages, but a few that stand out are companies such as Cigna, which announced the other week that not only will it raise the base wage for all employees to $16 per hour, but the company will also increase 401(k) matches to boost retirement savings. And if you thought $16 an hour wasn’t enough, Dyer Capital Management in Massachusetts recently raised its base wage to a new high of $22 per hour.

These announcements should speak more to our state legislators than the loud voices of minimum wage advocates. When job creators are freed from paying excessive taxes, they can use their savings to reward employees by increasing their wages and providing additional benefits. More than four million working Americans have already benefited from higher pay and overall better benefits from their employer.

Happier workers without the unintended consequences. What’s not to love?

Scott Strom of Pittsfield is a Republican member of the House of Representatives.


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