PORTLAND, Maine — Since the clock struck midnight on Jan. 1, 2024, thousands of Maine workers are earning a bit more. The minimum wage statewide went up from $13.80 per hour to $14.15 per hour. In Portland, it's now at $15 per hour. That change is having mixed effects on local businesses.
Maggie Rubin is the co-owner of Bread & Friends, a bakery and restaurant that opened in Portland's Old Port in April of 2023. Now approaching that one-year anniversary, Rubin said she and her team are constantly facing new challenges. Raising pay for their workers this week, though, was not one of them.
"When we were sort of planning this [business], we were really thinking a lot more about not necessarily like, ‘What are we required to be paying people?’ but, ‘What makes sense in terms of the industry standard?’” Rubin explained.
For that reason—and because of the high costs of living in Portland—Rubin said Bread & Friends has been paying all of its employees at least a few dollars above the new minimum wage. In some ways, competitive pay is almost essential.
"It’s just really important, I think, for being able to retain folks and attract folks," Rubin said, later adding, "I hear from [employees] mostly about just the cost of rent being so challenging.”
The expense of life in Maine's largest city is surprising to Rubin and her husband, who moved to the Pine Tree State from San Francisco, notoriously one of the most expensive places to live in the entire country. But, inflation has affected everyone. Experts like James Myall, an economic policy analyst at the Maine Center for Economic Policy, said that's actually how the new minimum wage is being calculated.
"One thing that increasing minimum wage and indexing it to inflation does is that it means people can still afford the same kind of groceries and gas that they could before," Myall said.
Myall explained that per a law passed by voters in 2016, Maine's minimum wage is adjusted every year. When it hit $12 per hour in 2020, it began to change based on inflation. Myall said in the past, about one in three Maine workers saw changes to their income, as a result of increased minimum wage. He said today, that number is closer to one in five.
"We estimated that around 127,000 Mainers would be impacted by the minimum wage," Myall said. "That is a decent chunk of the workforce."
Myall said we're currently in a stronger labor market that favors employees. It means employers are increasing wages faster than the minimum wage is rising in order to retain talent. Some, though, like HospitalityMaine's director of government affairs Nate Cloutier said businesses are hurting.
"I don’t see a circumstance where the wages keep rising, and the costs of doing business also doesn’t rise. The two seem to be pretty interconnected," Cloutier said.
He said most businesses that HospitalityMaine works with are operating with a two- to three-percent profit margin, meaning they don't always have the means to meet new minimum wage standards. As a result, the prices of goods and services continue to rise.
"The cost of everything else has gone up. That has to be absorbed somewhere," Cloutier said.
A bill carried over to this legislative session proposes changing Maine's minimum wage statewide to $15 per hour. Cloutier said HospitalityMaine and the Governor's office oppose this idea.