Montgomery County to increase minimum wage to $17.15 for some employers

Montgomery County will raise its minimum wage starting Monday for large employers to $17.15 to keep up with local inflation.

Large-sized employers include companies with 51 or more employees, according to the county, which is also raising its minimum wage to $15.50 an hour for midsized businesses with 11 to 50 employees. Small businesses will continue to have a $15 hourly wage, which is the same as the state’s.

The new hourly wages are based on the consumer price index for urban wage earners and clerical workers in the Washington, D.C., Arlington and Alexandria areas. Montgomery County’s wage law — based on legislation sponsored by County Executive Marc Elrich in 2017 — had increased the minimum wage to $15 in phases and is now indexed to inflation.

“I sponsored this legislation in 2017 because I firmly believe that increasing the minimum wage for low-wage workers is one of the most important actions we can take as a government,” Elrich said in a news release. “Ensuring that individuals and families can afford rent, food, health care and transportation is essential.”

The new wage increase will help families across the county keep up with many expenses related to children, food, medicine, rent and transportation and more, Elrich said in a Thursday interview.

“There are a million different reasons why the wage ought to be at a level that supports the person’s ability to live in a community,” he said.

The wage is also higher than any state-level hourly minimum wage in the nation, according to the U.S. Department of Labor. Washington D.C. will also increase its minimum wage to $17.50 on Monday.

The fast-food industry, restaurants, non-tipped workers and entry level jobs are most likely to be affected by this increase, according to Daraius Irani, chief economist for the Regional Economic Studies Institute at Towson University.

To compensate for paying higher wages, businesses will be faced with the choice of bumping prices or investing in capital over workers, Irani said. Restaurants may start to see more kiosks or ordering apps that replace workers, he said.

“From the workers’ point of view, it’s great to get this increase but also recognize that they’re also, in some cases, just treading water,” Irani said. “They’ve got an increase in wages, but everything else has gone up as well.”

A rising concern about this change is that businesses may become confused by the differing levels of minimum wage for different-sized companies, said Montgomery County Chamber of Commerce Vice President of Governmental Affairs Brian Levine. Montgomery County’s minimum wage differing from the state’s $15 minimum wage may also cause confusion as well, he added.

Although businesses may have concerns about competing now that they may have to raise prices, the wage increase will affect all businesses across the county to keep the playing field level, Elrich said. There should be more focus on business rental prices and health care insurance costs for employees, rather than a wage increase that will support workers, he added.

Montgomery County’s minimum wage is higher than any county’s in the state, Elrich said.