A battle is shaping up in Annapolis over whether — and by how much — to increase Maryland’s minimum wage.
After a four-year gradual increase, Maryland’s minimum wage reached $10.10 an hour last year, which is greater than the federal minimum of $7.25 and above what surrounding states require. But advocates and progressive leaders say $10.10 is not enough, and they are pushing lawmakers to raise the wage again — this time to $15 an hour.
Groups representing restaurants, retailers and small businesses are pushing just as hard to quash a measure they see as a job killer.
The proposal to raise the minimum wage to $15 is gaining momentum for a variety of reasons, including that many newly elected senators and delegates made it a campaign issue.
Advocates for increasing Maryland’s minimum wage will push legislation to gradually raise the hourly rate to $15 by 2023, a starting point for negotiations on what’s expected to be one of the hottest topics of this year’s General Assembly session.
“We have a lot of fresh new faces in Annapolis and they are really eager to get something done this year,” said Ricarra Jones, a union organizer and one of the leaders of Maryland’s “Fight for $15” campaign.
In addition, more states around the country are adopting higher minimum wages, and big companies are increasing workers’ starting pay, as well. Amazon, for instance, announced in October it would pay all of its U.S. employees at least $15 an hour.
Supporters of the Fight for $15 coalition, which includes the Maryland NAACP, faith leaders and an assortment of progressive groups, argue the higher wage is necessary to provide a basic standard of living. No longer are minimum-wage jobs just for teenagers; increasingly families rely on them, advocates say.
Increasing the minimum wage gives more workers “a fighting chance at prosperity,” said Sen. Cory McCray, a Baltimore Democrat and lead sponsor of the bill.
An employee working 40 hours a week at Maryland’s $10.10 minimum earns about $21,000 per year. A $15 wage equates to about $31,000 per year for full-time work. Supporters believe that would be enough for most American workers to afford a one-bedroom apartment and their basic needs.
Business interests who in past years have succeeded in having the bill die without a vote are hoping to defeat the bill again — or at least weaken it. They argue that mom-and-pop businesses and others that employ low-wage workers can’t afford to pay more.
As Maryland lawmakers got back to work, Gov. Larry Hogan expressed doubts about the wisdom of increasing the state’s minimum wage to $15 per hour. Hogan questioned whether raising it would put Maryland at a disadvantage for attracting businesses. He noted that Virginia’s minimum wage is $7.25.
“Some advocates of the $15 minimum wage would have you believe that this is somehow a silver bullet for lifting people out of poverty,” said Michael O’Halloran of the National Federation of Independent Business. “That simply is not the case.”
It’s possible that the debate in Annapolis will center less on whether to increase the minimum than on the details of who should be eligible and how much the wage should go up.
The assembly’s powerful Democratic leaders have said they support raising the minimum wage in some fashion — but not necessarily to $15 an hour for everyone statewide. Senate President Thomas V. Mike Miller opened the door for a weakened version of the bill by floating the idea of a geographically-based minimum wage — higher in Central Maryland, lower in rural areas such as the Eastern Shore and Western Maryland.
Recognizing the possibility that their bill could be scaled back, the Fight for $15 group is urging legislators to pass a “clean $15” bill that’s not watered down.
Jones says opponents “know there’s too much momentum to kill the bill, so they’ll try to poke holes in it.”
With Democrats pushing for the raise and Gov. Hogan questioning it, we wanted to ask our readers their thoughts on the issue.
The business groups’ official position, however, is that the entire bill should be defeated. They’re focusing on bringing freshman lawmakers up to speed on what they see as the downsides of the legislation.
Larry Richardson, vice president of the Maryland Chamber of Commerce, said his group will attempt to put a human face on the debate. Employers aren’t all greedy corporations with deep pockets, he said.
“Using the word ‘business’ creates this nonliving entity. What we’re talking about are employers, men and women that have to run a business,” he said. “They employ people and they’re trying to earn a living.”
While $15 an hour is popular and sounds good, it could be “catastrophic” to small businesses such as restaurants, said Melvin Thompson, a senior vice president of the Restaurant Association of Maryland. His group is asking restaurant owners to contact their lawmakers to share stories on how a higher minimum wage would hurt them.
“There is a significant number of new legislators in the General Assembly that we have to work hard to educate on this issue because they don’t have the benefits of last year’s debate,” Thompson said.
Bars and restaurants are especially concerned about a provision that would phase out a lower wage paid to employees who receive tips from customers, such as servers and bartenders. Maryland’s minimum wage for tipped employees is $3.63 per hour. Currently, if the base wage and tips don’t add up to at least $10.10 an hour, an employer must make up the difference in salary.
As the General Assembly session begins Jan. 9, Maryland’s Democratic-controlled legislature is expected to push for a range of progressive proposals — everything from a constitutional amendment to preserve a woman's right to abortion to raising the state's minimum wage to $15 an hour.
Under the bill, the lower minimum wage for tipped workers, also known as a “tip credit,” would gradually increase to $15 by 2026. That means restaurants and bars would have to pay all workers at least $15 an hour in addition to any tips they might receive, which is unsustainable, Thompson said.
The bill also would remove exemptions that allow businesses to pay some other employees less than minimum wage, including some agricultural workers, commission-based workers, teens in the first six months of a job and seasonal recreational workers.
Other opposition to raising the minimum wage comes from a bigger-picture view that employers and employees should decide wages without government interference.
Gov. Larry Hogan has expressed concerns about competitiveness. The Republican governor has said that while a higher minimum may sound good, he worries the increased cost could chase businesses and jobs to neighboring states, potentially harming low-wage workers that the bill purports to help. Through a spokeswoman, Hogan declined to comment further for this article.
Maryland is one of 29 states that has elected to set a higher minimum wage than the $7.25 federal standard. Congressional Democrats introduced a bill this month that would increase the federal minimum to $15 by 2024. Though the bill faces uncertain prospects on Capitol Hill, advocates believe it helps spur interest in the issue.
Maryland’s minimum wage of $10.10 is higher than in surrounding states.
Amazon’s move to boost its U.S. workers’ minimum wage to $15 per hour next month could put pressure on large retailers and other employers to follow with similar increases, especially amid a tight labor market where job openings often outnumber applicants.
Pennsylvania and Virginia follow the federal minimum wage of $7.25. Delaware and West Virginia have a minimum wage of $8.75, with Delaware’s scheduled to increase to $9.25 this fall.
Other states are increasing minimum wages. New Jersey is the latest, with Gov. Phil Murphy and legislative leaders reaching an agreement this month raising the minimum wage to $15 by 2024. The minimum wage in the District of Columbia is $13.25, going up to $14 this summer.
In addition to Miller’s proposal for different minimum wages for different parts of the state, others have discussed allowing smaller businesses to have a lower minimum wage than large businesses.
McCray said it’s imperative that all workers earn at least $15 — no matter where they live or what type of business they work for.
The Baltimore senator said increasing the wage would especially help people of color and women, who disproportionately work in low-wage jobs.
“Bringing up that equality is very, very important,” McCray said.
In the House of Delegates, Del. Diana Fennell, a Prince George’s County Democrat, is lead sponsor of the legislation.
Advocates also want to preserve the ability for Maryland’s local jurisdictions to raise their own minimum wage if they want to — as has been done in Prince George’s County (currently $11.50) and Montgomery County (on its way to $15).
The debate comes as a growing number of big-name employers are raising their wages: In addition to Amazon, Target is raising its base pay to $15 by 2020, Costco is going to $14 and Walmart is at $11. Locally, the Anne Arundel Medical Center announced Tuesday that it is boosting its base pay from the current $13 to $15 per hour, affecting 1,100 of its 4,850 employees.
The proposed legislation in Annapolis would raise the minimum wage to $11 this summer, and then add $1 each year until reaching $15 per hour in 2023.
After 2023, the minimum wage would be linked to the Consumer Price Index for the region, so that it would automatically increase without lawmakers needing to act. The Consumer Price Index is a federal government measurement of the average cost of certain consumer goods. Under the Maryland bill, the state would be required to review the CPI annually, increasing the minimum wage if the CPI increases and keeping it the same if the CPI decreases.