The latest report from the nonpartisan Economic Policy Institute makes a compelling case for raising the minimum wage, nationally and in Maryland. Legislation introduced last week in Annapolis would raise the minimum from $7.25 an hour to $10 in two years and keep it indexed to inflation — a move that EPI says will not only put $778 million more in the pockets of Maryland workers but create 4,280 new jobs from increased economic activity generated by the higher pay.
We know that the reaction to many in the business community will be, as it has always been, unyielding opposition. They will argue that raising the minimum wage will only hurt job growth — that employers who might have expanded their operations will instead have to spend more on existing employees.
But here's the problem with that argument. That's not how it's working out elsewhere. That includes quite a few states that are generally not seen as liberal or unfriendly to business including Florida, Colorado, Arizona, Alaska, Maine, Nevada and New Mexico. All require employers to pay a minimum wage above the $7.25 per hour federal standard.
Add to that the more traditionally Democratic Northeast, upper Midwest and West Coast states where state-enforced minimum wages have continued to climb despite the recent recession, and it's clear that Maryland is, if anything, behind the trend.
Who benefits from a higher minimum wage? EPI estimates about 536,000 people, or roughly one in five workers in the state. The majority of them are women, and a whopping 87 percent are 20 years or older. (So much for minimum wage being only for teen summer employment.) Indeed, nearly half the workers in line for higher wages have some college education.
But the higher minimum wage would also benefit everyone else. Not only because it will generate more consumer spending and help the overall Maryland economy but because it's likely to reduce dependence on costly government programs like Medicaid. The improved well-being of working families could yield huge benefits — better outcomes for children, a reduction in poverty rates, improved school performance and on and on.
Is $10 by 2015 too big a jump? Perhaps for businesses that provide health insurance and other benefits to workers, too. Lawmakers ought to be open to compromise, particularly as companies transition to the requirements of Obamacare. They also may wish to explore a geographic approach to the minimum wage law since some of the more rural parts of Maryland have a lower cost of living.
Nevertheless, it's clear that Maryland is lagging. The state with the highest median family income in the nation ought to be looking out for its lowest paid workers, too. Not to penalize small businesses but to help them stay competitive and boost the economy.
The General Assembly has been down this road before. In 2005, Democrats approved raising the standard in the state to $6.15 per hour when the federal minimum wage was $1 lower and then voted to override then-Gov. Robert L. Ehrlich Jr.'s veto. Yet, adjusting for the Consumer Price Index, that $6.15 of eight years ago would have to be $9.27 now to have the same buying power, according to the Bureau of Labor Statistics.
That Democrats were so anxious to confront a Republican governor over the minimum wage but have shown so little interest in the subject since then speaks volumes about how much clout low-paid workers have in state government. If a higher minimum wage is good for 19 states and the District of Columbia, it ought to be good for Maryland's economy, too.