By Jamie Smith Hopkins, The Baltimore Sun
6:27 PM EDT, May 13, 2013
The fight over the federal minimum wage is coming to Baltimore.
The head of the U.S. Department of Labor plans to swing into town Tuesday to talk to low-wage workers about how they make — or don't make — ends meet. Seth D. Harris, the agency's acting secretary, has crisscrossed the country for such events since President Barack Obama proposed in February that the minimum be raised from $7.25 an hour to $9.
"The president during the State of the Union said that it's an outrage that in the richest country on earth that people are working full time and still living in poverty," Harris said in a telephone interview Monday. "So that's the moral core of the proposal. But I've also found [as] I've been traveling around the country and meeting with minimum-wage workers that … as soon as this money goes into their pockets, they're going to turn right around and spend it in businesses in their communities."
Debates about minimum wage usually recycle arguments from previous rounds, including dueling economic studies over the contention that a higher minimum causes job loss.
But this year, there's a new twist. Some advocates point to uncertainty over health-care costs related to the Affordable Care Act, saying the timing is bad.
"Laying on top of that a new wage mandate … would be a mistake for the economy," said Ellen Valentino, Maryland state director of the National Federation of Independent Businesses, a small-business association.
Companies with fewer than 50 employees will not be charged a penalty if they don't provide health-care coverage, and very small businesses could qualify for tax credits to help offset insurance costs. But Valentino said small businesses will still see a hit from rising taxes and premiums.
Minimum-wage legislation now in Congress — proposed by Sen. Tom Harkin of Iowa and Rep. George Miller of California, both Democrats — would raise the floor to $10.10 an hour in three stages. Afterward, it would automatically rise along with the cost of living.
That's higher than Obama's proposal but closer to minimum wage's value in 1968, when it amounted to $10.70 an hour in today's dollars, advocates say.
Obama's $9-an-hour proposal would effectively provide a raise for about 15 million people, including 219,000 in Maryland, the Labor Department said. Those workers are largely adults — not teens — and a quarter are supporting children, the agency says.
Harris, the labor secretary, will visit Our Daily Bread in Baltimore to talk to minimum-wage workers helped by that charity and other groups in the city. He's held a dozen such "roundtables" since February and has sent senior officials to nine more.
Harris said he expects to hear experiences in Baltimore similar to those shared by Jessica Nunez, a single mother in Philadelphia. He said Nunez told him she works two minimum-wage jobs and struggles to afford necessities such as food and clothing.
"We've begun reaching out to employers, and I expect to be meeting with them soon," Harris added.
Mary Anne O'Donnell, director of the community services division for Catholic Charities of Baltimore, which runs Our Daily Bread, said housing costs are a major hurdle on minimum wage. Low-wage earners come to the organization seeking help with housing as well as energy bills.
Our Daily Bread also helps people find work, but often the jobs pay minimum wage, O'Donnell said.
"It's really a difficult situation," she said. "I just wish there was a better way to help the individual who is trying to get ahead, trying to work, trying to improve their skills."
Both sides in the minimum-wage debate have studies to bolster their argument about the economic effect — either that increases in the wage prompt job loss or that they don't.
A National Bureau of Economic Research paper in 2006, for instance, reviewed minimum-wage research and concluded that a "sizable majority" found "negative employment effects." Two other studies-of-studies determined that "the minimum wage has little or no discernible effect on the employment prospects of low-wage workers," according to a Center for Economic and Policy Research paper in February.
David Cooper, an economic analyst at the Economic Policy Institute in Washington, which focuses on issues affecting lower-income people, thinks the best evidence from the long body of research points to little or no effect.
The majority of minimum-wage earners work for large companies in the retail, fast-food and hospitality sectors, not for small businesses, he added. Big corporations have the infrastructure to deal with high turnover — small businesses don't.
"When you're paying workers these super-low wages, they're constantly going to be scrambling to find other jobs," he said.
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