The Impact of a $12 Minimum Wage in Maine

Proponents of a higher minimum wage in Maine, led by the state AFL-CIO, have gathered enough signatures to put their proposed $12 minimum wage to a vote this November. But earlier today a coalition representing approximately ten thousand Maine business owners announced their support for a competing $10 minimum wage proposal.

Last year, residents and businesses of Portland faced a similar situation. They rejected a $15 minimum wage proposal and opted to maintain their $10.10 wage. Even left-of-center voters recognized that a $15 wage would be devastating to small businesses in Portland, and it was defeated by a nearly 20-point margin.

But would a $12 minimum wage have the same harmful impact statewide? The evidence suggests so. Economists William Even of Miami University and David Macpherson of Trinity University replicated the methodology used in the non-partisan Congressional Budget Office’s 2014 report on raising the minimum wage, which was informed by the latest and most up-to-date research on the subject. They estimate that roughly 3,800 jobs would be lost in Maine if a $12 minimum wage was implemented by 2020. (This estimate is conservative, as it doesn’t include the impact of the change in the tipped minimum wage.)


Maine has been here before. The state raised its minimum wage during the past decade, along with 27 other states, and subsequent research from economists at American and Cornell University found little impact on poverty rates. With little to gain, and thousands of jobs to lose, the state’s voters may want to think twice before endorsing a dramatic hike in the starter wages.