General Assembly votes to accelerate $15 minimum wage to Jan. 1

Maryland’s minimum hourly wage will be $15 beginning Jan. 1 under a bill from Gov. Wes Moore that passed in the General Assembly on Tuesday.

The pay hike that lawmakers approved is less ambitious than what Moore sought, but the governor has maintained an upbeat tone as the bill worked its way through the legislature. He’s scheduled to begin signing bills into law on Tuesday of next week.

“The North Star of our administration is creating pathways to work, wages, and wealth and this legislation will lift up hardworking Marylanders statewide,” Moore wrote in a tweet on Tuesday.

Moore, a Democrat, initially proposed raising the $13.25 minimum wage to $15 per hour for all businesses beginning Oct. 1 — more than a year before the state’s current law would require it.

The minimum wage would have also been tied to the Consumer Price Index, which measures how the prices that consumers pay change over time, according to the U.S. Bureau of Labor Statistics.

Maryland is one of 30 states and Washington, D.C., that has a minimum wage higher than the federal rate of $7.25 per hour, according to the Economic Policy Institute, a nonprofit think tank based in the district.

Twenty states and Washington, D.C., automatically increase their minimum wage when prices rise.

State lawmakers, though, removed the link to the Consumer Price Index and delayed the minimum wage increase by a few months.

Maryland’s minimum wage for businesses with 15 or more employees is $13.25 per hour, and it’s $12.80 for those with fewer than 15 workers, according to the Department of Legislative Services.

Under the current law, the minimum wage would have hit $15 per hour on Jan. 1, 2025 for large businesses, and on July 1, 2026 for small businesses.

Republicans on Tuesday said that increasing the minimum wage a year early would hurt small businesses.

House of Delegates Minority Leader Jason Buckel, R-Allegany, proposed allowing businesses with fewer than 15 employees to wait until 2025 to raise their hourly wage to $15.

“All this amendment would do is acknowledge that that truly, truly small business is different than the big businesses,” Buckel said. “It’s a small thing. It may not be a game changer for them, but it’s symbolic and it’s important.”

Democrats, who have a supermajority in both the House and the state Senate, voted down Buckel’s proposal and said that exempting small businesses from the wage increase would be detrimental to them.

With a “dramatic” drop in the number of workers available for hire in the aftermath of the pandemic, delaying the wage increase for small businesses could hinder their ability to compete for workers with larger employers, said Del. C.T. Wilson, D-Charles, who chairs the Economic Matters committee that prepared the proposal for a vote in the House.

“We’re doing this to make sure that — because we have such a small unemployment rate — that these small businesses are able to compete with the big businesses,” Wilson said.

Maryland’s unemployment rate was 2.9% in February, while the national unemployment rate was 3.6%, according to the U.S. Bureau of Labor Statistics.

To pay for the new minimum wage, state spending will increase $218 million next fiscal year and $109 million the following year, according to the bill.

The state’s budget for the next fiscal year is $63 billion.