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- The Forecaster
PORTLAND — A citywide minimum wage is probably coming, but not at the level or the speed sought by Mayor Michael Brennan.
In a 90-minute meeting of the City Council Finance Committee on Jan. 22, Councilors Jon Hinck and Jill Duson and committee Chairman Councilor Nick Mavodones Jr. signalled they are open to creating a minimum wage above the state-mandated $7.50 per hour.
“I am predisposed to going with some kind of minimum wage, (but) I haven’t gotten to a point where I know how much,” Duson said.
The committee set a March 12 date for one more public hearing on the proposed ordinance, with the expectation it would vote at the hearing’s conclusion on advancing an ordinance to the full City Council.
That would lead to a possible City Council vote in early April, following one more public hearing.
But as Brennan conceded at the meeting’s conclusion, no new wage will be created this year.
“I don’t hear much sentiment for a July 1 implementation,” he said.
A Dec. 5, 2014, draft of the wage ordinance outlined Brennan’s intent to set the first minimum wage at $9.50 per hour beginning July 1. On Jan. 1, 2016, the wage would have increased to $10.10 per hour. On Jan. 1, 2017, it would have increased to $10.68 per hour, and subsequent annual increases would have been tied to increases in the urban living measurement of the Consumer Price Index.
Committee members sought more information about how a minimum wage would affect workers, residents and businesses owners after a Dec. 11, 2014, public hearing that lasted almost three hours.
In the end, they learned what Brennan’s subcommittee learned when it began examining wage issues last April: existing studies provide conflicting conclusions and data about who earns how much in the Portland area and how many minimum-wage workers live in the city.
“There will still be questions about data, but I don’t know we are going to get any more data,” Mavodones said.
A survey of Portland Buy Local businesses produced about 65 responses, indicating members already pay more than the minimum wage and usually more than $10 per hour.
Portland Regional Chamber of Commerce Executive Director Chris Hall, a member of the subcommittee, also said last spring that chamber members were paying above minimum wage.
Brennan supplied the committee with a packet of data from studies and surveys, along with conclusions and commentary from University of Southern Maine economics professor Charles Colgan and business consultant Jim Damicis, but the partial answers did not address how many people living in the city earn minimum wage, or even how many would be affected by an increase of $1 or $2 per hour.
Colgan said the difficulty lies in part with the fact the minimum wage is often a starting point for new employees who see raises after evaluation periods, and Maine Department of Labor wage statistics are inadequate for measuring local incomes.
His review of available studies led Colgan to conclude “there has been no clear evidence that raising the minimum wage has widespread or long-term negative effects on employment or businesses.”
While agreeing on the lack of specific data, Damicis said local companies paying minimum wages “are effectively being subsidized by Portland taxpayers” because people working at minimum wage require more public assistance for housing, transportation and health services.
Brennan’s desire is to create a minimum wage between 50 percent and 60 percent of the average median income for the city, pegged at $17 per hour by Garrett Martin, executive director of the Maine Center for Economic Policy, in a wage subcommittee meeting last June.
Duson said her preference for a new wage would be close to 50 percent of the average median income. She opposed automatic increases, and supports instituting a training wage for teenagers under 16 who are required to have work permits.
“I think the council is ready to compromise on the amount and that is because of the dynamic of the political process,” Duson said.
A sticking point in the wage discussion has been the “tipped wage,” a provision in state law allowing employers to pay workers earning more than $30 a month in tips 50 percent of the minimum wage.
City restaurant owners including Steve DiMillo, David Turin and Michelle Corry expressed concern the 50 percent rule would require them to boost tipped wages, even though tipped employees are the highest-paid employees.
In his memo to the Finance Committee, Brennan reiterated his intention the tipped wage remain at $3.75 per hour, or half the current state minimum wage, no matter what wage may be created in the city. As with state law, employers will be responsible for ensuring employees making the tipped wage are paid the full minimum wage when tips do not make up the difference.
The intention pleased Greg Dugal, president and CEO of the Maine Restaurant Association, but he remained unconvinced that ordinance language matched Brennan’s stated desire.