The latest iteration of legislation requiring Baltimore to increase its minimum wage to $15 an hour makes various concessions designed to ease the transition for businesses. It includes a slower phase-in for small businesses and expanded definition of which firms qualify and exemption for youth workers and workers who rely on tips for their income. The changes were enough to win over City Council President Bernard C. "Jack" Young, whose skepticism about the potential negative effects, particularly on youth and small businesses, helped scuttle a $15 an hour bill last fall.
But the legislation still suffers from what we view as a fatal flaw: It would place Baltimore City at a substantial competitive disadvantage to the surrounding suburbs when it comes to employment and business growth. As much as we believe Baltimore's working poor need help to make ends meet, setting up the city as an island of higher wage costs in the middle of more prosperous and lower-cost suburbs would hurt more than it would help.
Several other cities have committed to $15 minimum wages, and the most comprehensive and objective study so far of the impact — a University of Washington evaluation of Seattle's move toward a $15 minimum — shows effects that range from mildly positive to mildly negative, depending on what metrics and assumptions are used. The economy in San Francisco, another early adopter of the $15 movement, hasn't fallen into the Pacific either. But there is no comparison between the situation faced by Baltimore and those in places like Seattle and San Francisco. Baltimore's economy may be growing faster than the rest of the state, as The Sun's Luke Broadwater reported on Sunday, but its economy is still nowhere close to those of the pioneers in enacting $15 an hour laws.
•Baltimore is substantially poorer. Median household income here is $42,241 a year; in Seattle, it's over $70,000. In San Francisco, it tops $80,000. The poverty rate here, 22 percent, is nearly double the rate in Seattle and San Francisco. The percentage of adults in the labor force here is 8 to 11 percentage points lower than in those cities, and the unemployment rate (7.4 percent) is more than double that in Seattle or San Francisco.
•The cost of living in those places is much higher. Average monthly rent in Baltimore is $951. In Seattle, it's $1,185 and in San Francisco, it's $1,558. The difference for homeowners is even more stark. The consumer price index for the Baltimore region — a figure that includes Washington and its suburbs where the cost of living is higher than in Baltimore City — is well below the national average. San Francisco and Seattle, by contrast, are among the most expensive places to live in the United States.
•Those cities are regional hubs of economic activity in a way Baltimore is not. For example, per capita retail sales in Baltimore City are less than $6,000 a year. In San Francisco, they're $17,000; in Seattle, an astonishing $63,000. Both of those cities (and particularly San Francisco) vastly outpace Baltimore in food service and accommodation receipts, a sign of tourism spending.
•Seattle and San Francisco are both substantially richer than the states of which they are part; Baltimore is substantially poorer. That's true when it comes to income, poverty, unemployment, labor force participation, educational attainment and more.
Last month in Montgomery County — which is richer even than San Francisco and Seattle when it comes to income, poverty and a number of other characteristics — County Executive Isiah "Ike" Leggett vetoed a $15 an hour minimum wage for fear that it would put his jurisdiction at a competitive disadvantage with those around it. And that came in the context of previous plan to raise the minimum wage in Montgomery and Prince George's counties to lift their minimum wage to $11.50 by 2020 ($1.40 more than the state minimum will be by then) and Washington, D.C.'s decision to ramp up to $15 an hour in the years ahead.
Mayor Catherine Pugh has prudently expressed skepticism about this legislation. She has previously said she would prefer to see the minimum wage raised uniformly on the state level, and this week she asked council members to think carefully about the impact of their proposal on the unemployed and those just beginning to enter the labor force. Should it be necessary, we hope she will veto the legislation. Baltimore is making economic progress. Jobs are coming back to the city, and incomes are rising, but we have a long way to go. Now is not the time for policies that could make Baltimore broadly uncompetitive with the suburbs.