How Maine’s new pay transparency law could impact the economy

AUGUSTA, Maine —

As of July 29, most employers in Maine are now required to include salary ranges in active job listings. Maine is now one of at least 18 states and territories with pay transparency laws. The law, which was enacted during the last legislative session, applies to Maine employers with 10 or more employees.

“I think it will help everyone, but it will be particularly helpful for those vulnerable groups, because folks like women, people of color are more likely to be lowballed in job interviews and are more likely to end up earning less than white men,” said James Myall, senior economic policy analyst at the Maine Center for Economic Policy.

The law also requires employers to maintain pay history records, and workers are entitled to see what colleagues in comparable roles are earning.

“In some ways, the idea is to kind of rebalance things so that employers don’t hold all the cards in job negotiations,” Myall said.

Economists are still studying the long-term effects of pay transparency laws. One paper from the National Bureau of Economic Research found wages in states with pay transparency laws increased between 1.3% and 3.6% compared with states without those requirements.

Myall said that kind of wage growth could benefit Maine’s economy.

“We know that when those folks are paid fairly, that money does tend to stay in the local economy a little better,” Myall said.

He said that is especially true for wage increases among lower-income workers.

“Every extra dollar that those workers get kind of, in their paycheck, tend to get spent locally rather than being saved or being spent out of state,” Myall said.

The Maine Department of Labor will be responsible for ensuring employers comply with the new law.