October 10, 2018
FOR IMMEDIATE RELEASE: October 9, 2018
Media Contact: Laura Hudson, Department of Labor, 207-621-5009
AUGUSTA -- Today, Maine Department of Labor (MDOL) Commissioner, John Butera, called into question the accuracy and validity of a recent policy brief out of the Maine Center for Economic Policy (MECEP) that directly connects the 2017 raise in minimum wage with a reduction in poverty among Maine children.
"This policy brief uses the wrong data, resulting in flawed conclusions," said Commissioner Butera.
According to economists in MDOL's Center for Workforce Research and Information (CWRI), the conclusions of the policy brief are flawed because the MECEP analysis relied on household income rather than individual earnings from work to argue that the increase in the minimum wage is driving reductions in poverty. This approach does not take into account that most households include more than one person, and most include other sources of income in addition to earnings; especially low income households, which may receive transfer payments.
"This administration has placed a priority on making Maine competitive," Butera said. "Our economy has been booming for the past several years, the result of sound policy and fiscal responsibility that have led to lower, sustained unemployment rates and higher wages."
For 33 consecutive months, the longest in state history, unemployment has remained below 4-percent, resulting in more Mainers working. This coincides with the number of people in poverty declining between 2016 and 2017.
"The way you lift Mainers out of poverty is to provide education and training that will help individuals gain skills that are in the demand, especially when labor market conditions are so tight and many businesses are struggling to find staff with the skills they need," said Commissioner Butera. "That's why this department and this administration are doing everything possible to ensure that the most resources available for workers flow directly into job training," he said, referring to the department's recent success in increasing the amount of federal funds that must be spent directly on relevant workforce skills.
MDOL encouraged MECEP to either retract or correct their recent findings to eliminate any question of intent or bias. CWRI staff contend that the only way to evaluate if the increased minimum wage is providing the lift the MECEP claims is to examine hourly wages and hours worked of those in poverty. They assert that the report did not do that; and there is no source of reliable data such as this that currently exists.
Center for Workforce Research and Information develops and disseminates state and area labor market information on employment, unemployment, wages and other measures to assist in making decisions that promote economic opportunity and efficient use of the stateā€™s labor resources. http://www.maine.gov/labor/cwri
Maine Department of Labor is an equal opportunity provider. Auxiliary aids and services are available to individuals with disabilities upon request.