While the leaked communications of Donald Trump and Hillary Clinton have dominated headlines, another embarrassing disclosure was recently made in Maine. Financial disclosures filed this month with the Maine Ethics Commission show that the state’s leading minimum wage political-action committee, Mainers for Fair Wages, is overwhelmingly funded by non-Mainers.
An analysis of the disclosures indicates that 75 percent of the PAC’s $674,000 in monetary contributions comes from out-of-state interests, including labor unions and labor-union funded activist groups. When a $138,000 transfer of funds from its state ballot question committee is factored into the analysis, this percentage could jump to as high as 95 percent.
Where are these out-of-state donors coming from? They include a $50,000 donation from Stanford, California, one of the wealthiest parts of the country, whose Santa Clara County has a median household income roughly double that of Bangor’s Penobscot County. The public policy that may work in wealthy California enclaves does not transcribe to rural Maine.
In addition to hundreds of thousands of dollars of contributions from labor unions, donations also come from far-left activist groups such as the Restaurant Opportunities Center and the Center for Popular Democracy in New York City.
Contrast this to the contributions made to efforts opposing the $12 proposal: According to the Bangor Daily News, of the $117,000 total received by skeptics of $12 — less than one fifth that given to Mainers for Fair Wages — 89 percent came from Maine donors. These were largely made up of small business owners who understand the impact that the proposal would have on their companies and employees.
According to a recent analysis by Drs. David Macpherson of Trinity University and William Even of Miami University, the impact would be substantial. They find a $12 minimum wage in Maine would cost the state 3,800 jobs, with women and young employees bearing the brunt of the job loss. (This finding should be considered conservative because the analysis doesn’t consider the proposal’s 220 percent increase in the tipped minimum wage.)
The economists also conclude that small businesses in the state would be hardest hit from the wage hike, with a majority of the job loss coming from the ranks of Maine’s more than 25,000 small businesses with fewer than 100 employees. This finding counters proponents’ talking point that big businesses would shoulder the brunt of the burden, and is likely why a only a small percentage of these small businesses have been willing to endorse the proposal.
Places that have already experimented with a $12 minimum wage have learned these lessons the hard way. In Oakland, California, which raised its minimum wage to $12.25 last year, restaurants and grocery stores in the Chinatown neighborhood went out of business as a partial result. Numerous childcare providers in the city have had to reduce hours because they cannot pass the costs of the wage hike on to their clients; the local eatery Lanesplitter Pizza did try to pass along costs to its customers — with a “living wage” pizza of $30 or more.
In nearby New York state, numerous small businesses have been forced to cut hours, lay off staff, or close entirely in response to a dramatic increase in the tipped minimum wage — not unlike the one included in Maine’s ballot initiative. Betty’s Diner in Buffalo, Longway’s Diner in Watertown, and Peppermill Restaurant in Rochester all reduced their hours of operation in order to cut down on unsustainable labor costs associated with the new wage requirement. McGirk’s Irish Pub in Binghamton, P.J. Clarke’s in New York City, and Piggy Pat’s BBQ in New Hartford eliminated staff positions entirely to try to compensate for these costs.
And most recently, the Del Rio Diner in Brooklyn closed after 40 years in business because its blue collar customers couldn’t afford the higher prices necessary to offset the cost of $15. These and other stories can be found on Facesof15.com.
Ultimately, the decision about whether to raise Maine’s minimum wage comes down to Maine’s voters. To make an informed vote, they should be armed with the knowledge that the leading proponents in the state are little more than front groups for national labor organizations and their extreme agenda, and that it’s being funded by out-of-state people who won’t lose their jobs when the pink slips arrive.
Michael Saltsman is research director at the Employment Policies Institute of Washington, D.C., which receives support from businesses, foundations and individuals.
Send questions/comments to the editors.
