Rep. Elijah E. Cummings urged state lawmakers Monday to raise Maryland's minimum wage to $10.10, arguing that lower wages will continue to strain government programs that help the poor.
The Baltimore Democrat added his voice to a chorus of Democratic leaders backing Gov. Martin O'Malley's proposal, which would increase the minimum hourly rate from $7.25 and tie future wage hikes to the rate of inflation.
Speaking at a hearing of the Senate Finance Committee, Cummings said workers who earn the current minimum wage depend heavily on public assistance to make ends meet.
"We are subsidizing employers who pay only the minimum wage," he said.
But business groups told the lawmakers that employers would have to scale back their operations if faced with higher costs.
"We will close 10 stores over the next three years if this bill passes," warned David J. Norman, president of DavCo Restaurants LLC, a Crofton-based company that owns more than 150 Wendy's franchises in the Mid-Atlantic states.
A George Mason University economist warned that O'Malley's proposal would reduce jobs and slow the economy.
A new Baltimore Sun poll shows the governor's minimum wage proposal enjoys the support of 69 percent of Maryland voters, and has majority support even in the most conservative regions of the state.
But opponents said the questions put by pollsters don't spell out the consequences of an increase.
"It has to have an impact on something," said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason. "This is not free money."
Fuller said his study of the impact of an increase on Maryland shows that a raise to $10 an hour would cost 6,000 jobs in the first year. He said the cost to the state's economy would compound over time.
"As the job base slows and cost of living increases, Maryland becomes less attractive to people moving here," he said.
But David Cooper, an analyst with the Economic Policy Institute, said research shows that past increases in the federal minimum wage have not had much impact on employment.
O'Malley's minimum wage proposal has emerged as the flagship bill of O'Malley's final legislative session as governor. He told senators Monday that the increase he supports would add $456 million in economic activity over three years.
"It is the right thing for all of us because it is the right thing for our economy," he said.
O'Malley said he welcomes proposals to increase the earned income tax credit — a break aimed at the working poor — but not as a substitute for raising the minimum wage.
Lt. Gov. Anthony G. Brown, who is running for the Democratic nomination to succeed O'Malley, told the panel that increasing the tax credit to 30 percent would add about $268 to the annual income of person making about $15,000 a year. Pushing the minimum wage to $10.10 over three years, he said, would eventually give that worker another $5,000 a year.
Opponents sometimes dismiss arguments about the benefits of an increase for full-time workers by saying a raise would mainly affect teenagers who work part-time jobs. Brown said the typical minimum wage worker is a 33-year-old woman — not a teenager, as opponents sometimes say.
Sen. Richard Colburn, an Eastern Shore Republican, said he expects the majority Democrats to enact an increase, but he pleaded with the panel to exempt his region.
"The Eastern Shore is in a recession," he said. "A minimum wage increase would be devastating to our Eastern Shore economy."
Colburn was testifying in favor of a bill he introduced that would allow each county to determine its minimum wage.Copyright © 2014, The Baltimore Sun