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Strong push on minimum wage for 2014 Assembly

Election-year politics and a growing national focus on the minimum wage could result in the first increase in Maryland since 2006 in the coming General Assembly session.

But that might depend on how much proponents are willing to compromise.

The debate over the minimum wage, currently $7.25 an hour, highlights the tension between organizations and elected officials who claim the issue is a matter of social and economic justice and employers who say the increase will cost jobs.

Del. Dereck E. Davis, D-Prince George’s and chairman of the House Economic Matters Committee said increases proposed at the state level and some counties are too high. He said they’d help workers, but severely impact businesses.

“It’s not that I am unsympathetic, because I am,” said Davis, who was the lead sponsor on the 2006 bill. “We raised it a dollar back then. What [supporters] are proposing is significantly above that.

“Once you get to $10, $11.50, $12.50 an hour, that’s a significant increase, and while I understand the goal, some will benefit while others will lose out,” Davis said.

A coalition lead by labor unions wants the General Assembly to increase the minimum wage to $10.10 an hour over three years. That matches legislation before the U.S. Senate.

Del. Aisha Braveboy, D-Prince George’s, said she intends to sponsor a bill in the coming session to increase the minimum wage and believes it will pass.

“We cannot allow companies to make a profit by keeping people below the poverty line,” Braveboy said.

“That’s not an acceptable policy of the state,” Braveboy said. “It’s impossible for people to support themselves and their families without public assistance on $15,000 a year. Many of these people are raising families.”

Multiple changes

The bill likely to be introduced in the session that begins in January will look similar in most respects to the bill that died in committee last year.

Its provisions will include:

• Phasing in an increase from $7.25 to $10.10 an hour over three years.

• Expanding the classification of employees eligible for the increase to include workers in a number of sectors that are currently exempt from the minimum wage. These include workers 62 or older who work 25 hours or less, movie and drive-in theater workers, and canning and freeze-packing employees.

• Covering cafés, drugstores, drive-in restaurants and taverns that serve food for onsite consumption that have a total gross income of $250,000 annually or less.

• Increasing the minimum wage for wait staff from 50 percent of the state minimum wage to 70 percent.

• Linking the minimum wage to the consumer price index to ensure an annual increase.

Matthew Hanson, campaign director for Raise Maryland, said indexing the minimum wage to inflation is an important aspect of the bill.

“This is not a fight workers should have to fight every few years,” said Hanson. “It’s something that should be done automatically.”

Important or not, Delegate Davis said the provision is a nonstarter as far as he is concerned.

“Folks don’t want to fight the same fights,” Davis said. “They want to win once and be done with it. I see the advantages of that but this is what we were elected to do. These are policies worthy of public discussion.

Going with the trend

Maryland is currently one of 23 states whose minimum wage mirrors the federal government’s. State law requires an increase if the federal government passes an increase in the hourly rate, which was first regulated in 1938.

Five states — California, Connecticut, New Jersey, New York and Rhode Island — have all approved increases that would put the minimum in the $8 to $9 range, phased in through 2015.

Locally, Montgomery and Prince George’s counties and Washington D.C. are exploring a possible regional compact that would increase the minimum wage to as much as $12 per hour.

Davis said he objects to a regional approach and thinks the issue should be handled by state or even the federal government.

“We want to do right by workers, but we have to maintain a competitive balance,” he said.

All three Democratic candidates for governor have announced their support for an increase.

“It’s an election year,” said Donald Norris, professor and chairman of the Department of Public Policy at the University of Maryland, Baltimore County. “These kind of policies play very well to the Democratic base.”

But Braveboy said there is more than mere politics in play.

“From my perspective it’s a human issue,” she said. “For others it’s about politics.”

Fighting to survive

For some business leaders who oppose the increase, the proposal is about financial survival.

“It’s going to cause businesses like us to favor growth in other areas,” said Dave Norman, president and general counsel of DavCo Restaurants, which employs about 3,800 people at 153 Wendy’s franchises in Maryland and Northern Virginia.

Norman said sharp increases in the minimum wage could cause businesses like his to close locations or lay off employees, leading to fewer jobs in an already poor economy.

Hanson, of Raise Maryland, disagreed and said the “bottom-up economic impact of increasing the minimum wage would create about 4,000 jobs.” He suggested jobs would be created because workers who were being paid more would spend more.

“Minimum-wage workers don’t have the luxury of putting their checks in a bank account or throwing it into stocks and bonds,” Hanson said. “When you give an increase to a worker who makes minimum wage they go out and spend it.”

Daraius Irani, executive director of the Regional Economic Studies Institute at Towson University, said the results of such increases are not always clear cut.

“It’s kind of a mixed bag of results when it comes to economic impact,” said Irani. “I can see both sides of the argument.”

Irani said consumers who do not make minimum wage will likely see a small erosion of their buying power as a result.

“Employers have to pass these costs on to someone,” Irani said, comparing it to the effect of the gas tax. “It will be a slight increase, but it’s going to chip away at buying power for some.”

Playing the numbers game

Despite the variety of statistics being bandied about, it’s often difficult to discern the true impact.

Hanson and his group point to a study by the Economic Policy Institute, a liberal think tank that supports minimum wage increases, which concluded that an increase in the minimum wage to $10 an hour would affect 535,000 people in Maryland.

A Bureau of Labor Statistics study in 2012 estimated that the number of employees in Maryland working for an hourly wage at 1.3 million. Of those, the agency estimated that only 67,000 — about 5 percent — were making the federal minimum wage or less.

Hanson said some of the disparity in the numbers can be attributed to workers who make more than the minimum wage but would receive increases as they were phased into a $10-per-hour pay scale.

Norris, the public policy professor, said solid statistics can often be hard to come by.

“It’s not unusual to see wildly inflated numbers used to make an argument on either side,” said Norris.

“Both sides of this issue use a lot of numbers to try to prove that this will kill jobs or increase jobs,” Norris said. “There’s just no good evidence about what the impact on jobs will be.”

Polls and politics

If elected officials are guided by polls, supporters of increasing the minimum wage in Maryland have reason to believe this could be their year.

A poll conducted by Gonzales Research & Marketing Strategies for Progressive Maryland, a coalition of liberal groups, found that 82 percent of people surveyed in October favored increasing the minimum wage to $10.10 an hour.

And a separate poll conducted by the Sarah T. Hughes Field Politics Center at Goucher College reported that 74 percent of those surveyed said they would support an increase to $10.

Similarly, a national poll conducted by Gallup earlier this month found that nearly three-fourths of those surveyed supported increasing the minimum wage to $9 per hour.

But a poll conducted for Reason.com, a Libertarian-oriented website, found similar results to the Gallup poll but said support plummeted to 37 percent when the question included the potential for job layoffs.

Braveboy, the Prince George’s delegate, said she believes her bill would have passed last year if not for other priorities.

“We had the votes on the floor in the House,” she said, adding that she believes the bill will pass this year.

Davis, the Economic Matters Committee chairman, said the bill was held up because bigger issues including gun control, the gas tax and abolition of the death penalty, garnered so much focus.

“There’s only so much heavy lifting leadership can do,” Davis said.

While there is some potential for passing an increase, Davis does not believe it will come without compromise from supporters.

“I think it has a real shot,” Davis said. “It will move to the top of a lot of people’s lists and reasonable heads will try to prevail. I’m trying to manage expectations here. Some adjustment is in order, but we need to be reasonable.”

About this series 

This is the third in a weekly series of articles by The Daily Record’s Bryan P. Sears highlighting issues in the upcoming General Assembly session in preparation for Annapolis Summit 2014, a two-hour program on Jan. 8 featuring Gov. Martin O’Malley, Senate President Thomas V. Mike Miller and House Speaker Michael Busch.

The summit will be hosted by Marc Steiner, whose The Marc Steiner Show on WEAA 88.9 FM is broadcasting a weekly feature on the same subjects as the newspaper series. This topic will air on WEAA Friday at 10 a.m. and will be posted at steinershow.org

Next week: Solving the bail hearings crisis .