Brown to pitch minimum wage hike

Lt. Gov. Anthony G. Brown will stand in for Gov. Martin O'Malley in making the administration's case to a House committee Tuesday for raising Maryland's minimum wage.

O'Malley had been scheduled to testify before the House Economic Matters Committee, in one of his last appearances before the General Assembly.  But he will instead attend the funeral of Baltimore construction magnate and philanthropist Willard Hackerman, who died Monday at age 95.

The House panel will hear from a bevy of supporters and opponents of increasing the state's lowest hourly pay rate in stages to $10.10 an hour by 2016. The measure also would index the wage to increase automatically with the cost of living, and it would also raise the base pay of waiters and other workers who earn tips.

What raising the minimum wage will or won't do is hotly debated, even among economists.

Proponents say it will restore some of the income lost over the past 45 years by the working poor, as the minimum wage has not kept pace with inflation. They predict higher wages will increase consumer spending, boosting the economy, boost productivity, reduce worker turnover and reduce government welfare costs, among other things.

Opponents argue raising the minimum wage will actually hurt poor workers, as employers will compensate for the increase in payroll costs by hiring fewer people or cutting back their employees' hours.  They also contend the raises will drive up prices, costing all consumers. 

A study by a George Mason University economist released Monday predicted raising the minimum to $10 an hour would result in 11,500 jobs being lost, draining more than $700 million in personal income from the state's economy.  The study was commissioned by Maryland Business for Responsive Government.

On the other hand, the Economic Policy Institute, a think tank backing higher minimum wages, predicts that increasing to $10.10 could generate more than $456 million in new consumer spending over the next two years and create or support 1,600 new jobs as businesses expand to meet increased demand.

Federal labor statistics suggest a growing earnings gap in Maryland, according to an analysis by the state Department of Legislative Services.  In 2012, 67,000 Maryland workers earned the federal minimum wage or less - 61 percent of them women, according to the Bureau of Labor Statistics.  The share of the state's workforce earning at or below the minimum has grown from 2.1 percent in 2003 to 5 percent in 2012, while at the same time median hourly earnings grew from $12.08 to $14.17.

The governor's bill, HB295, could affect far more than those currently earning the federal minimum, though. As of December, about 334,000 workers in Maryland were earning up to $10.10 an hour, though not all would get raises if the bill passed because their jobs are not covered by wage-and-hour laws or they work for government agencies exempt from the law.  Another 150,000 workers now making more than $10.10 could see their wages increased to preserve internal pay scales, predicts the Economic Policy Institute.

Twenty-one other states and the District of Columbia already pay more than the federal minimum wage of $7.25, which is Maryland's current minimum as well. 

President Obama has proposed raising the federal minimum wage to $10.10, but with Congress slow or unlikely to act, a coalition of labor, civil rights and religious groups is campaigning to raise the wage state by state.

Besides the governor's proposal, the House committee will also air five other bills dealing with the minimum wage. One by Del. Keith E. Haynes, a Baltimore city Democrat, would raise the minimum wage to $12.50 an hour this year, which could directly affect more than 600,000 workers earning that much or less. Another, put in by Del. Neil Parrott, a Wahington County Republican, would authorize counties to set their own minimum wage rates, as long as they were no lower than the federal floor. Still another, by Del. Tony McConkey, an Anne Arundel Republican, would let counties set "training wages" for new workers below the minimum.

To watch the hearing online, go here.


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