Minimum Wage Failure

When Republicans took over the state legislature in 2011, Maine ranked 50th—dead last—in the growth of wages for our workers. Beginning less than two years later, from 2012 through 2015, Maine led the nation in wage growth. It led by so much, the next fastest growing state was a full half percentage point behind.

Not content with this roaring example of economic recovery, those who think only government action can solve problems, placed a referendum on the ballot in 2016 to artificially raise the minimum wage by government force, rather than letting the economy continue to raise workers’ earnings.

Even before the election arrived, businesses began anticipating the increase in labor costs and held off on hiring new workers or giving out raises or bonuses. In the third quarter of that year, Maine’s ranking fell to 21st. Immediately after the measure passed, Maine wages declined for the first time in years and its ranking fell to 31st. A year later, it fell again to 40th. Sometimes the smartest thing government can do is nothing, and in so doing avoid the law of unintended consequences.