Maryland lawmakers are considering a proposal that would incrementally raise the state’s minimum wage to $15 over the next four to six years. That would be more than double the federal minimum wage of $7.25 – which has been unchanged for roughly a decade -- and a significant increase over Maryland’s current $10.10 minimum wage.
While advocates had pushed for “clean” legislation that would raise the state’s minimum wage to $15 by 2023, it seems more likely that a revised bill that would raise the minimum wage to $11 per hour by Jan. 1, then by another 75 cents each year until it reached $15 in 2025, has a better chance of getting approval.
Not only does it stand a better chance of approval, by incrementally increasing wages at a slower pace, it gives businesses a little more time to catch up and less chances for the detrimental effects that can come with a rushed increase in wages. Ultimately, an increase in wages will give workers more purchasing power, which should in turn give companies more business that helps them to pay a living wage.
And make no mistake, a living wage is what we’re talking about here.
Opponents of minimum wage increases will sometimes argue that minimum wage jobs aren’t intended to be careers, but rather stepping stones into the workforce, and therefore shouldn’t pay a living wage. But a living wage is always what President Franklin Delano Roosevelt intended when the federal minimum wage was first made law.
“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country,” he said in his 1933 address following the passage of the National Industrial Recovery Act. “By ‘business’ I mean the whole of commerce as well as the whole of industry; by workers I mean all workers, the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level — I mean the wages of decent living.”
A living wage calculator, developed by MIT, shows that living wage in Maryland should be $15.08. For Carroll County, and most of Central Maryland, it is a bit lower at $13.69, but still above the existing minimum wage.
Raising the minimum wage is largely a party-line issue and research is largely a mixed bag, with studies that have come to contradictory conclusions, although many tend to show that there is little effect on the overall number of jobs, although the types of jobs do change.
Democrats argue that a rising tide lifts all boats, and that increasing the minimum wage would put more money in people’s pockets, boosting the economy through increased spending power. Republicans and business groups say a higher minimum wage will force employers, especially small business owners, to cut hours or shed employees. Carroll County’s Board of Commissioners has already expressed that concern.
However, we think that slowing down the pace of the minimum wage will ease those concerns, as businesses will be able to prepare incrementally.
Unfortunately, the revised bill that slows down the pace of the minimum wage increase also removed a requirement that after the minimum wage hit $15, future increases would be automatic and tied to the federal Consumer Price Index.
Wages have failed to keep up with inflation and economic growth, which is why a sudden shove from current minimum wages to a living wage could prove disastrous for an economy. Had lawmakers in Maryland and our nation kept the minimum wage on pace with the economy over the years, perhaps there wouldn’t be such a push to catch up so rapidly.
Legislation that does not call for the state’s minimum wage to keep up will have us facing the same problems down the road.