For the third time in a decade, Maryland lawmakers are debating and likely to pass an increase to the state’s minimum wage.
What’s still undecided, though, is whether they’ll set themselves up to have the same conversation again in a few years.
Democratic lawmakers are coalescing around part of a proposal from Democratic Gov. Wes Moore that would boost the minimum wage to $15 in October — ahead of a scheduled increase to that rate in 2025. Proponents say the quicker raise, from the current state minimum wage of $13.25, is needed after three years of the COVID-19 pandemic and the ensuing spike in inflation.
Another element of the bill would enact yearly minimum wage increases to keep pace with inflation, starting in July 2025.
Opposed by portions of the business community and Republican lawmakers, that provision also has faced some pushback from Democrats, who control both chambers of the General Assembly.
“There’s a lot of ongoing conversation about making sure that we have a balanced approach to the cost of businesses this term,” Senate President Bill Ferguson, a Baltimore Democrat who has expressed concerns about that part of the bill, said earlier this week after Moore testified on his bill in a House committee.
Moore testified for his proposed Fair Wage Act again in the Senate on Thursday, signaling it as a priority for his first year in office. He again stressed the need for indexing the wage to inflation at a time when the costs of household goods continue to rise.
In June, the consumer price index showed inflation had increased 9.1% over the previous 12 months, a recent record. While that annualized rate has since declined, it trended upward slightly in January to reach 6.4%, according to the U.S. Bureau of Labor Statistics.
“Make no mistake. Without indexing, Maryland families will fall further and further behind over time,” the governor said. “If we do not ensure that the minimum wage keeps pace with inflation, it will be worth less in 2029 than it is today.”
According to a legislative fiscal analysis of Moore’s bill, the minimum wage would increase to $15 on Oct. 1 and then begin increasing with inflation by adding 35 cents to the hourly rate in 2025. By 2030, it would hit $17.15 and by 2034 it would reach $18.80, according to the analysis, which used an estimate of the consumer price index in the region in future years.
Some lawmakers with concerns about the legislation expressed worries Thursday that such a timeline might not be aggressive enough for workers and advocates who want the wage to increase faster.
Senate Minority Leader Steve Hershey noted that the wage will have roughly doubled in a decade, if it reaches $15 this year.
“Could there be some type of an agreement that, if this is passed and it’s tied to CPI, that we’re not going to see advocates come in in two years and say, ‘Well, you know, it only went up 35 cents last year and it only went up another 35 cents the following year. We need $20 now,’” said Hershey, a Queen Anne’s County Republican.
Moore, responding to a similar question in the hearing, noted provisions in the bill that would cap the increase at 5% each year and allow the Maryland Board of Public Works to pause it under certain conditions. Those moves would allow officials to “have hands on the wheel, yet at the same time not [have] the same annual debate,” he said.
Riccara Jones, who represents health care workers as the political director for SEIU 1199, said even if advocates return for higher wages in the years ahead, lawmakers should support the bill this year because it will help workers to keep up and employers to have more predictable labor costs.
“When you think about how rapidly costs are rising now, $17 [in 2030] is going to be like $13 today,” said Jones, noting that advocates in some other states already are talking about a $25 minimum wage.
Maryland Policy & Politics
She said that’s also an argument to not have a cap on minimum wage increases.
Of the 19 states, plus Washington, D.C., that have laws indexing their minimum wage to inflation, 17 don’t have caps, according to the Maryland Center on Economic Policy.
“People are starting to get that if you don’t index it, it’s basically a pay cut,” Jones said. “Because everything else is going to keep rising, but wages are going to stay the same.”
The minimum wage is already higher and linked to inflation, or is scheduled to be linked to inflation, in two Maryland counties — Howard and Montgomery.
Montgomery, which passed its wage law in 2017, hasn’t seen a negative impact from employers leaving as a result, even though the county received pushback from the business community, Montgomery County Executive Marc Elrich said in an interview.
Elrich, testifying next to Moore on Thursday, said the indexing element is “vitally important.”
“When businesspeople tell me this is something they can’t deal with — they deal with an increase in materials, they pay more. If food costs more, they pay more. If electricity costs more, water costs more — the only thing they can’t pay more for are the people who make their businesses work,” Elrich said. “There’s something wrong with that.”