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Councilwoman to propose $15 minimum wage for Baltimore

Baltimore City Councilwoman Mary Pat Clarke. (File)

Baltimore City Councilwoman Mary Pat Clarke. (File)

Baltimore City Councilwoman Mary Pat Clarke is proposing an increase in the minimum wage for Baltimore workers to $15 an hour by 2020, following similar measures recently passed in New York and California.

Such an increase could raise the pay of 80,000 workers, or 25 percent of the city’s workforce, the councilwoman said Friday. Clarke is holding a news conference announcing the bill at City Hall on Monday.

“It’s become the gold standard for bringing people into equity,” said Clarke about the $15 figure. The councilwoman has been working with the National Employment Law Project to draft a bill that fits Baltimore. NELP has been part of the national push to raise the minimum wage and prompted Clarke to bring Baltimore into that effort.

In 2014, the General Assembly passed a bill to raise the state’s minimum wage in stages to $10.10 by July 2018. The current state minimum wage is $8.25, with a 50-cents-an-hour increase set for July 2016.

Montgomery and Prince George’s counties have passed bills to raise their minimum wages to $11.50 by 2017.

Under Clarke’s proposal, the minimum wage for Baltimore would be phased in starting July 2016, when the minimum wage would be raised to $8.75; then $10 in January 2017, $10.50 in July 2017, $12 in July 2018, $13.50 in July 2019 and $15 by July 2019. Starting July 2021 and onward, the minimum wage would be increased based on the prior year’s increase in the cost of living, the bill said.

“Nobody is going to get rich on this, but self-sufficiency goes hand in hand with equity,” said Clarke.

Council members Bill Henry, Brandon M. Scott, Robert Curran, Sharon Green Middleton, Edward Reisinger and Carl Stokes are co-sponsoring the bill.

The Economic Policy Institute’s Family Budget Calculator estimates a single person has to make just shy of $34,000 a year, or $16 an hour, to cover basic living expenses. That number goes up to more than $74,000, or $36 an hour, for a family of four with two adults and two children.

Clarke’s legislation also would affect tipped employees — workers who receive $30 or more month in tips. The bill would do away with sub-minimum wage for those workers by 2024.

“This sub-minimum wage is a major factor fueling higher poverty rates and economic insecurity among this predominantly female workforce. These workers must rely substantially on tips to make ends meet and are vulnerable to sudden, unpredictable drops in pay as tips fluctuate from shift to shift and season to season,” the National Employment Law Project said in a report about the bill.

The phase-in would start in January 2017 at $4.50, with a raise to $5.25 in July 2017, $6 by July 2018, $7.50 by July 2019, $9 by July 2020, $10.50 by July 2021, $12 by July 2022, $14 by July 2023 and $15 by July 2024. From that point forward, previously subminimum wage workers would be paid the full minimum wage.

The bill will also eliminate exemptions for full-time students, work-study programs and disabled employees. Full time students who work 28 hours a week or less will be allowed to have a lower minimum wage.

Seven states including California, Nevada, Oregon, Washington, Minnesota, Montana, and Alaska do not have a subminimum wage. Workers are tipped as a gratuity on top of their regular wages, according to a NELP report on the subject. That report also found that women make up two-thirds of workers in tipped occupations and more than 30 percent of them are parents.

“People who work for tips are numerous (…) and an important part of our residential base,” said Clarke.

While Clarke expects pushback from the business community, she hopes it will generate a healthy debate and wants to make the bill as “employer friendly as possible.”

“What I’m hoping for is conversations in which we agree that we have a problem, we have a divide and we have to help people raise themselves up to be self-sufficient,” she said.

This isn’t the first time Clarke has worked on a minimum wage bill. In 1994, she introduced the city’s first living wage bill. In 2010 she introduced a minimum wage bill for retail workers that didn’t make it out of committee.

Economists fall on both sides on the issue of whether $15 is an appropriate minimum wage. Some say that it’s necessary to get by in expensive areas such as Silicon Valley in California, while others say that $15 is an arbitrary figure.  In an op-ed in Fortune Magazine last year, Brookings Institution fellow Harry J. Holzer argued that a $15 minimum wage is risky in cities with a lot of lesser educated workers, particularly unskilled immigrants, because employers are less likely to want to pay higher wages to people with low skills.

With local minimum wage increases, Holzer said, businesses might be tempted to move to another state or outside city limits. It may also give businesses more incentive to reduce labor costs through automated systems, such as self check-out in stores or hotels charging guests more for housekeeping.

“None of this suggests that the crisis of low wages for American workers isn’t serious. But there is no silver bullet — raising the minimum wage alone won’t solve it,” wrote Holzer, adding that the federal government should look at ways to expand education and training opportunities for low-skill workers, offer a moderate minimum wage increase and expand Earned Income Tax Credits for childless adults.