City Council President Bernard C. "Jack" Young said $11.50 is the most the city could afford. (Baltimore Sun video)
Last week, members of the Baltimore City Council's Labor Committee demonstrated why the proposed $15 minimum wage legislation is a bad idea — they started writing in special exemptions. The message of these changes was clear: Raising the minimum wage above the state and federal standards simply doesn't make sense for certain employers.
In this case, the exemptions went out to the city's YouthWorks program and to the Maryland Zoo in Baltimore. No doubt the reasoning in those cases was sound — raising the wage for youth jobs, for example, would either prove too costly for the cash-strapped city or reduce the number of summer jobs available. But how many other Baltimore employers face a similar quandary and simply don't have the political acumen or clout to get City Hall carve them out, too?
City Council President Bernard C. "Jack" Young may have put it best when last week he concluded that city government and the private sector simply can't afford a $15 minimum wage — even if the requirement is delayed until 2022. "We just can't do $15," said Mr. Young who floated the idea of an $11.50 minimum wage instead.
By all accounts, City Council members remain divided on the issue despite strong opposition from business leaders. They shouldn't be. Raising the living standards of Baltimore residents, particularly its disadvantaged, is a commendable goal, but that's not what this measure will do. The real issue is how to best to provide a proper reward for those willing to work hard, and it's doubtful that raising the minimum wage this dramatically — well above what all other cities, towns and counties in Maryland require — will have the intended effect.
Make no mistake, there's a place for the minimum wage, but it is supposed to be the floor on wages, not the average and certainly not the ceiling. It's a concept that's been around for decades — but, unfortunately, is sometimes allowed to lag behind inflation. The Maryland General Assembly helped correct that problem several years ago by raising the minimum wage to $10.10 by 2018. As part of that legislation, the state minimum wage rose to $8.75 on July 1.
There are any number of benefits that accrue from gradually raising the minimum wage — a boost to the local economy as people spend more, a better standard of living for low-wage workers and an overall increase in wages as employers are pressured to sweeten non-minimum wages to keep pace with those of entry-level workers. But raise the minimum wage too far too fast, and employers are likely to look for savings elsewhere by cutting jobs, delaying expansion plans or relocating their businesses elsewhere.
That last alternative is the most worrisome for Baltimore. If surrounding counties don't impose a $15 minimum wage, might businesses be tempted to flee, particularly when it means moving only a few miles down the road? Would start-ups decide to set up shop in downtown Towson or Columbia rather than downtown Baltimore?
Admittedly, the $15 minimum wage has built up some steam elsewhere across the country. It's been adopted by a dozen cities, two states and the District of Columbia. As one might expect, it's been an easier sell in jurisdictions like Seattle and San Francisco where the cost of living is high and the unemployment rate is low. Baltimore isn't cheap, but the city's 6.1 percent unemployment rate (as of May) is the highest in the Baltimore-Washington corridor.
Even affluent Montgomery County, Maryland's biggest employment center with a 3.3 percent jobless rate, has not yet embraced a $15 wage. Why should Baltimore be the guinea pig? Why should Charm City risk jobs it can ill-afford to lose? This is one case where inaction might be the best economic development leadership the City Council can provide.
No doubt passing a minimum wage would help certain council members politically — although neither Mayor Stephanie Rawlings-Blake nor her likely successor, Sen. Catherine Pugh, has jumped on the bandwagon. The mayor has said she'd be willing to sign the bill into law, but that position may be more calculated than conciliatory (had she opposed it, wavering council members would be tempted to vote yes, knowing that it would be vetoed anyway).
Yet just as worrisome is the message the City Council would be sending, however unintentionally, by adopting Maryland's highest minimum wage — Baltimore is unsympathetic to small business owners and thus not a place to start or grow a business. That "business unfriendly" moniker is no small thing, as Larry Hogan, who made the same charge about Maryland as a whole, demonstrated two years ago when he was elected governor. Baltimore needs more jobs and higher wages and, unfortunately, the $15 minimum wage would hurt both those ambitions.