ANNAPOLIS – Gov. Martin O’Malley lauded Maryland’s new living-wage law Friday, saying the “government should not be in the business of perpetuating poverty.”
Under the law, which will take effect Oct. 1, government contractors will have to pay $11.30 an hour to employees in urban areas and $8.50 an hour in rural areas. Maryland is the first state to enact a living-wage law.
But business groups suspect the law will unfairly burden state businesses. And unions and other living-wage advocates, while supporting the new law, fear it won’t help enough Maryland workers.
“We know the legislative process is not perfect,” said Michele Lewis, political director for the Maryland branch of the American Federation of State, County and Municipal Employees. But it is also “rare to get a kitchen-sink bill passed” the first time.
The Department of Labor, Licensing and Regulation will release the final version of the law Sept. 14, said Secretary Thomas Perez. He could not say how many Maryland workers will be affected by the new law.
Perez said Friday that his department currently does not track how many contractors are under the living-wage threshold but estimated “many thousands” of workers would see a wage hike.
Some living-wage advocates, however, believe the law has too many exemptions.
Non-profit contractors or those providing emergency services are not required to pay the living wage. Companies with fewer than 10 employees are also excluded, as long as contracts are not worth $500,000.
O’Malley called on contractors to go beyond the law’s requirements, for the first time singling out the Maryland Stadium Authority, which is not bound by the law. The authority, which manages both Oriole Park at Camden Yards and M&T Bank Stadium, currently pays its stadium cleaners $7 per hour, said Greg Rosenthal, spokesman for United Workers.
Fred Mason, president of the Maryland AFL-CIO, said the governor’s challenge to the stadium authority was only one of several positive signs for Maryland workers.
“We finally have a governor who doesn’t view unions as some sort of monster,” Mason said Friday after the news conference outside AFL-CIO headquarters where O’Malley made his comments.
But Ron Wineholt, vice president of government affairs for the Maryland Chamber of Commerce, fears the living-wage law will put some businesses at a competitive disadvantage when vying for contracts against non-profits.
“Wages should be set in the marketplace, not by the government,” he said.
AFSCME’s Lewis dismissed those fears, pointing to a 1999 Economic Policy Institute study that reported contract costs in Baltimore rose less than the rate of inflation in the four years after the city implemented a living wage. Wineholt and other business leaders “are always saying ‘the sky is falling,'” Lewis said.
Wineholt said that chamber members will “try and make the law work.” But he is concerned about several unanswered questions, such as if companies from outside Maryland will be subject to the law.
Perez indicated that all questions about the bill will be answered when the final version is released in two weeks and that he also looks forward to working with the business community as the law is implemented.
The fight over the bill’s passage “is yesterday’s news,” Perez said. “This is now about how to do this well.”