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No on Question 4: Official SMMC Stance

November 3, 2016

SMMC Official Stance
Vote No on 4:
If Question 4 passes it would hurt all businesses,
restaurants in particular, and our fixed-income seniors

After surveying the membership, the Southern Midcoast Maine Chamber is urging Maine citizens
to vote NO on Question 4: An Act to Raise the Minimum Wage.

To be crystal clear, the Southern Midcoast Maine Chamber is not opposed to a minimum wage increase.  However, Question 4 does much more than just add a simple raise to the minimum wage.  If passed it would be the steepest increase to minimum wage in US History, it adds inflation after 2020 so
minimum wage will continually rise, and most importantly, this rule will fundamentally change one of the
biggest industries in our tourism-driven state, the restaurant industry, by eliminating the tip credit. 

1. In a business survey this spring created by local chamber directors, 4 out of 10 businesses (43.30%) said they may have to layoff current employees if the Q4 passes. 
Additionally, 6 out of 10 businesses (60.32%) would be less likely to hire new employees. 
Respondents to the survey represented 56 different communities across Maine, from 77 different industries.

2. No state or federal minimum wage has ever increased $4.50 over four years. 
In fact, the $1.50 proposed raise in the first year of the proposal would be one of the ten steepest increases to minimum wage IF that $1.50 increase was spread over four years, instead of one.

3. A $12.00 minimum wage by 2020 will be the 2nd highest in the nation; and 4th highest by 2021, which is where it will stay ranked, assuming inflation doesn’t bring it up to 3rd a few years later. 

4. Every industry is different, and many states have minimum wage discrepancies based on the industry of the worker.  In fact, the tip credit for the restaurant industry is so common that every state east of the
Mississippi River has a tip credit of some sort and have for nearly three decades.  No state has ever
repealed their tip credit because they are so essential & fair.  Restaurants like DiMillo’s, Governor’s, Moody’s Diner and Becky’s Diner have all made commercials describing how bad this will be.

5. Most restaurants run on a slim margin of between 3 - 5% and new restaurants run even tighter margins
at 1 - 3%, if that.   An increase from $3.75 per hour to $12.00 per hour is an over 200% increase in
payroll expenses per employee.

6. Other factors business owners identified on the survey were:
-  Devastating to 300,000+ fixed income seniors who will have no way to afford higher prices on products
-  Fairness inequality of the “bump factor” to current employees and employers: if the new minimum wage
worker makes $12.00 what do you need to bump existing employees up to, to make it fair for them
-  Underemployment: One way for an employer to maintain payroll costs, without firing, is to cut back hours
-  Automation to replace workers: self-checkout grocery lines & restaurant server computers, etc. 

Question 4 is a bad solution for Maine businesses. 
However, a solution is needed to improving the wages in this state, but
not at the expense of our senior citizens and the devastation of our restaurant industry. 
Vote no on 4 and let’s encourage our 2017 legislators to work across party lines to come to a more sensible
solution that helps the employees and the employers of Maine. 

 

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