Bangor should let research guide the debate on higher minimum wage

Councilor Joe Baldacci speaking at a Bangor City Council meeting

Councilor Joe Baldacci speaking at a Bangor City Council meeting

By The BDN Editorial Board,
Posted Feb. 18, 2015

As Bangor City Councilor Joe Baldacci floats his proposal to raise the minimum wage within city limits starting next year, he’s seeking to make the community-wide debate an important part of the process.

Baldacci said he’s hoping to hold a public forum on the issue in March or April. Our hope is that the deliberative approach Baldacci has in mind will pan out and that the debate that unfolds will be one driven by the quest for high-quality information and analysis rather than a rush to judgment.

Rather than consider a higher minimum wage within Bangor city limits, many are saying the issue should instead be addressed at the state or federal level. We think either one is a better forum, too, but action in Augusta and Washington appears unlikely. Gov. Paul LePage has opposed past action to raise the minimum wage, and Republicans in Congress are just as steadfastly opposed to a federal minimum wage hike.

A Bangor-specific analysis on the impact of a municipal minimum wage hike would be an effective way to open the debate. But absent that, the best policymakers in Bangor can do is look to the experiences of the handful of cities across the U.S. that have raised their minimum wages for insight.

Santa Fe, New Mexico (population 70,000), and the much larger San Francisco, California (population 837,000), stepped out early and raised their wage floors in 2004 to $8.50 an hour. New Mexico’s minimum wage at the time was $5.15; California’s was $6.75.

Researchers have had the time to assess the wage hikes’ impact in both Santa Fe and San Francisco. The verdict? Neither city experienced measurable job losses or relocations of affected businesses across city lines. To be sure, businesses in the cities experienced higher costs from having to pay higher wages — research over the years has pegged the operating cost increase at 1 to 2 percent for every 10 percent hike in the minimum wage. In exchange, however, one study of fast-food restaurants in San Francisco found workers stayed in their jobs longer, on average, and were more likely to work full-time hours.

Since those two cities have raised their own minimum wages, other cities — some large and others smaller — have followed suit. A handful of cities in Maine are considering similar action.

Of course, there’s no certainty that a minimum wage hike in Bangor will play out the same way as it did in Santa Fe and San Francisco. And there are many logistical concerns that still must be addressed: How would Bangor’s ordinance apply to businesses, such as home healthcare, with employees whose work is in Bangor and other locations? Should the wage ordinance — unlike the current proposal — apply to tipped employees and the smallest businesses? Will a wage ordinance put Bangor at a competitive disadvantage with its neighbors?

Those concerns are certainly legitimate, and they should be an important part of the debate. There’s also the economic benefit to low-wage families to consider, though it would be unrealistic to speak of a minimum wage change as a significant economic jolt for the Bangor region. Efforts to equip low-wage workers with the skills and education they need to qualify for higher-paying jobs can’t be neglected.

It will be easy to say no to the proposal pending before Bangor’s councilors. It will be difficult to lead the way absent state and federal action. What’s important is that councilors and community members not look for easy reasons to dismiss a minimum wage ordinance — and that they look for high-quality information to guide their action.

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