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Bill to raise Maryland’s minimum wage faces opposition

Nicholas Sohr//Daily Record Business Writer//January 18, 2011

Bill to raise Maryland’s minimum wage faces opposition

By Nicholas Sohr

//Daily Record Business Writer

//January 18, 2011

ANNAPOLIS — A proposal to spark consumer spending by bumping the minimum wage to $10 an hour faces opposition from conservative lawmakers and legislative leaders loath to take any action they believe could slow job growth.

The legislation would gradually raise the minimum wage from the federally mandated $7.25 to $10 in 2013. After that, it would be indexed to inflation. The bill would also increase the minimum wage for tipped workers, like waiters, from half the minimum wage to 70 percent.

The measure is being pushed by Progressive Maryland, which lobbies for working families.

“There’s a group that certainly has been left behind,” Sen. Anthony C. Muse, D-Prince George’s, said Tuesday. “You can’t support a family on what we now call the minimum wage.”

Senate Majority Leader Robert J. Garagiola, who will be the lead sponsor, said shepherding the bill through the General Assembly will be “a challenging undertaking.”

Indeed, lawmakers who will oversee the shaping of the bill expressed reservations about imposing the wage mandate on business owners.

Senate Finance Committee Chairman Thomas M. “Mac” Middleton said Tuesday he would be “very hesitant” to support the measure.

“We’re trying to create jobs. We’re trying to hold on to what we’ve got,” said Middleton, D-Charles. “I think raising the minimum wage goes against that.”

His counterpart on the House Economic Matters Committee, Del. Dereck E. Davis, D-Prince George’s, said it was too early to tell how his committee would react to the proposal, but that it would be evaluated “on its merit.

“We understand the intent of the bill, but we also have to be mindful of its impact on business,” he said.

And Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s, said the bill, which would increase the minimum wage by 38 percent, is not “appropriate at this time.”

Maryland last increased the minimum wage above the federal level in 2007. The federal minimum was then stepped up to $7.25 between 2008 and 2010.

Supporters argue the bill could give the economy a boost by putting more money in the pockets of low-income households who have little choice but to spend it, pumping it back into businesses’ balance sheets.

Seventeen states and Washington, D.C., have set minimum wages above the federal level, with clusters in New England, around the Great Lakes and on the West Coast.

Minimum wage workers earn about $15,000, or less than half of the average income in the state. Under the legislation, they would earn nearly $21,000 in 2013.

“The minimum wage is our best tool for helping Maryland’s economy,” said Rion Dennis, executive director of Progressive Maryland.

Heidi Shierholz, an Economic Policy Institute economist who spoke on behalf of Progressive Maryland, said increases to the minimum wage don’t lead to job losses. She said the wage increase would affect about 320,000 workers, and inject about $1 billion in spending in the Maryland economy.

“This will provide a crucial stimulus to the Maryland economy when it needs it the most,” Shierholz said.

The bill’s opponents argue such a boost would come out of the pockets of business owners struggling with slack sales during the slow recovery.

“Our small businesses are already reeling from taxes and the economy,” said House Minority Whip Jeannie Haddaway-Riccio, R-Middle Shore. “That [minimum wage hike] would absolutely devastate them. It would be the last nail in the coffin.”

Maryland Chamber of Commerce President Kathleen T. Snyder called the minimum wage proposal “impractical and unrealistic.”

“There will be small business owners who have to choose between paying the higher wages or laying workers off,” she said. “In order to move the economy forward, we can’t afford to lose any more jobs. This is just bad timing, and bad public policy.”


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