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Portland, ME Raises Minimum Wage, Accidentally Increases Tipped Minimum, Too

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The city's minimum wage will increase on January 1 — and so might the tipped minimum wage due to an unexpected circumstance.

Kyle J. Norris

On Monday night, the Portland council voted 6-3 to raise the minimum wage from $7.50 to $10.10 per hour starting January 1, 2016. And the passage of Mayor Michael Brennan's proposal is just the beginning. As the Press Herald reported, "The wage will rise to $10.68 an hour in 2017, and starting in 2018 it will increase on July 1 at the same rate as the Consumer Price Index, which accounts for inflation."

This despite objections from people like Greg Dugal, executive director of the Maine Innkeepers Association and president and CEO of the Maine Restaurant Association, who said he's worried about the consequences of Portland being the only northeastern city "to have its own wage."

The Bangor Daily News noted in its coverage that "simultaneously and just a few blocks away," trending presidential hopeful "Bernie Sanders spoke to thousands of people in Portland...and among the policy goals he outlined was an increase in the minimum wage."

"I can save. I might be able to get a car."

As expected, many business owners are reacting negatively to the news. WGME13 heard complaints from Ray Marcotte of Dobra Tea and Jim Grattelo of Joker's, who actually moved his business from Portland to Westbrook in anticipation of such a wage hike. Also unsurprisingly, the one employee the station talked to, Rianna Tuttle of Moran's Market, is eagerly anticipating a quality of life boost: "I can save. I might be able to get a car."

Owner Jacques deVillier of Old Port Wine Merchants and Old Port Spirits and Cigars groused to WMTW8 that "he already starts his employees at $10 an hour and is concerned he'll have to increase the base pay to stay competitive." Cathy Walsh, owner of Arabica Coffee, is fully in favor of the change, particularly for the city's many female minimum wage workers. "I feel the more we empower these women and particularly mothers, the better our whole society is going to be. Those kids will grow up having their needs met and having opportunities instead of being stuck in the cycle of poverty."

Barbara Anania of Anania's Variety Stores griped to WCSH6, "We know what we're bringing in for money and we know what a business like this can sustain as far as paying salaries. I don't think the city understands that."

What of the tipped minimum wage, which sits at $3.75 per hour for bar and restaurant workers in Maine? Initial coverage didn't make clear whether this rate would also be affected by the new legislation. The Press Herald clarified today, however, that the city council has inadvertently voted to raise the tipped minimum.

The official response to this gaffe seems to be 'Whoops.'

"As written, the ordinance will raise the minimum hourly wage for tipped employees in Portland to $6.35 as of Jan. 1. A year later, the hourly wage for tipped employees will jump to $6.93. It will increase again each year based on inflation." This is because the current tipped minimum is achieved via a $3.75 credit subtracted by businesses from the regular wage, rather than being an independent figure.

The official response to this gaffe seems to be "Whoops," with Mayor Brennan admitting to the paper, "I'm in the uncomfortable position of talking to a reporter who knows more about this issue than I do." He said it was never his intention to raise the tipped minimum wage, "adding that there is time to amend the ordinance if necessary."

Julie Rabinowitz, spokeswoman for the Maine Department of Labor, cautioned that "about 40 percent of those earning minimum wage in Portland are tipped a minimum wage increase that didn't include them would be inherently unfair." Thankfully, there's still time for Mayor Brennan to amend his position if necessary. Even embattled Governor Paul LePage expressed support of a tipped minimum wage increase — though only because he hoped it would cause Portland's restaurants to fail.