By Carol Coultas,Business Writer

AUBURN – When Margaret Hackett heard there was a proposal to raise Maine’s minimum wage again, she got on the horn.

Hackett, owner of Georgio’s Pizza on Minot Avenue, pays all of her entry-level employees minimum wage. As they become more skilled, she increases their wages.

A bill to increase the minimum wage from $6.50 to $6.75 – and then to $7 in 2007 – has her worried. If she has to pay the new kid $7 to hire him, then she has to adjust the pay of her other dozen employees to preserve the merit increases they’ve already earned.

“It’ll have a mega impact on us,” she said. “We’ll have to raise wages across the board” and that means shrinking an already tight margin.

So Hackett called Sen. Lois Snowe-Mello, R-Minot, who is leading the charge against the proposed law. The bill, L.D. 235, is expected to come up for a full vote Tuesday before the Senate.

Its proponents say the bill is necessary to help Maine’s lowest-paid workers keep pace with rising costs of living. According to the state Department of Labor, just over 1 percent of Maine’s 396,000 hourly workers earn minimum wage (another 21,000 earn less than minimum wage but are additionally compensated with tips).

“The mom-and-pop stores haven’t even had a chance to absorb the last increase,” said Snowe-Mello, of the 15-cent hike that took effect this fall from a bill passed in 2004. “I plan to debate this quite heavily on the Senate floor.”

The bill squeaked by in the House on a 76-74 vote.

Adam Fisher, spokesman for the state Department of Labor, said the increase is needed.

“We believe that low-wage workers should get a cost of living increase,” he said. “Minimum wage has not kept up with inflation.”

Congress hasn’t raised the federal minimum wage since 1997, which now stands at $5.15 per hour. Seventeen states, including Maine, have higher minimum wages than the federal government.

Dave Clough, director of the Maine chapter of the National Federation of Independent Businesses, said his organization is opposed to the bill.

“We don’t like the idea of the Legislature trying to increase employment costs without regard to particular conditions,” said Clough, who represents 5,000 small businesses around the state. “The impact will vary according to the business and its location in the state,” adding that market forces are better at determining starting wages than government.

Neither the state Chamber of Commerce, nor the local Androscoggin chapter, has taken a position on the bill.

Peter Traill, chairman of the business advocacy committee for the local Chamber, said a minimum-wage increase hasn’t drawn interest from its membership.

“There has not been a hue and cry about it,” said Traill.

A survey of small businesses in Maine conducted by the state Chamber last year had minimum wage ranked last in issues of concern to small-business owners, dwarfed by taxes, health care and other costs of doing business.

That may be so, but Hackett said increasing the minimum wage will be significant for her. As owner/manager of a bustling small business, she wishes she could get to Augusta to testify.

“I would, but I’m so busy, I can’t get out of the store!” she said.

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