ANNAPOLIS – With the backing of Gov. Martin O’Malley, supporters of the “living wage” law asked Maryland lawmakers Tuesday to support legislation that would require all state contractors to pay their employees at least $11.25 per hour.
“This is a great opportunity to promote self reliance and to promote a decent middle class,” Thomas E. Perez, secretary of labor, licensing and regulation, told the House Economic Matters Committee.
He later promised: “If you put the bill on the governor’s desk, he will sign it with enthusiasm.”
If the General Assembly passes the bill, Maryland would become the first state in the nation to mandate that contractors pay a certain wage in order to qualify for state contracts over $100,000. Already, the city of Baltimore and Montgomery and Prince George’s Counties have what have come to be called living wage laws.
Under the bill, the living wage for 2008 would be a little less than $25,000 a year, a rate that would be adjusted for inflation annually. Employees who are minors or work part-time would not be eligible for the living wage, which is about $5.50 more per hour than the state’s current minimum wage.
Opponents of the legislation maintain that such requirements would cost the state “millions of dollars” in higher priced contracts at a time when the government is addressing a structural deficit. They also questioned the fact that some employers would be exempt from a wage requirement that proponents said was barely enough to put food on the table.
“Why is it not right for non-profits to pay enough for someone to eat?” asked Ronald Wineholt, vice president of governmental affairs for the Maryland Chamber of Commerce. “Why is the state government exempt from this bill when it’s the right thing to do?”
However, when legislators challenged him to produce evidence that any of the three Maryland jurisdictions with such a law suffered financially, Wineholt said he had none.
“It seems to me you would have been able to come to us with testimony as the others have,” said Delegate Dereck E. Davis, D-Prince George’s, the committee chair. “It’s perplexing why you didn’t go to those jurisdictions and get that empirical data.”
On the other hand, supporters of the legislation from Baltimore City, Montgomery and Prince George’s counties said that the contract cost increases their localities had experienced from a living wage requirement were minimal.
According to the financial analysis attached to the bill, cost increases for Baltimore City’s contracts went up by just 1.2 percent and Montgomery County reported no significant increases in the first two years since the law was implemented.
However, because of the limited data available, long-term cost increases are harder to predict and could jump as much as 16 percent, the financial analysis said. Lobbyists for the legislation said that higher wages would likely off-set the cost increases by both boosting the state’s income tax revenue and saving money on social programs.
“This bill ends the bad habit of creating poverty and then using tax dollars to create social programs to help them,” said Delegate Tom Hucker, D-Montgomery. Similar legislation was passed in 2004, but vetoed by then-Gov. Robert L. Ehrlich, a Republican. This year’s version is again sponsored by Delegate Herman Taylor, Jr., D-Montgomery, 59 other delegates, and also has the support of Comptroller Peter Franchot, worker’s rights groups and some clergy.