ANNAPOLIS – America’s wealthiest state, and one of its most expensive to live in, is primed for a battle between lawmakers who are pushing a statewide increase of the minimum wage and others who believe that one comprehensive hike doesn’t make sense in economically disparate Maryland.
Gov. Martin O’Malley earlier this week announced his support of a bill that would gradually increase Maryland’s minimum wage from the federal standard of $7.25 an hour to $10.10 an hour by 2016, indexing it to the cost of living starting in 2017 and raising the base rate for tipped workers from 50 to 70 percent of the minimum wage.
“The minimum wage in Maryland is no longer a wage that anyone can live on,” O’Malley said during his State of the State address Thursday.
“Raising the minimum wage to $10.10 is going to create more and better customers for Maryland businesses. And that is why raising the minimum wage in Maryland is not only good for the hundreds of thousands who will see a boost in their paychecks, it is good for every Marylander, because it is good for economy.”
While Maryland’s median household income of more than $71,000 ranked first in the nation in 2012 according to U.S. Census Bureau data, a report released last month by the Economic Policy Institute, a non-profit, left-leaning think tank based in Washington, D.C., said that the wages of more than 1 in 10 workers — roughly 306,000 people in all — would be directly affected by the governor’s proposed increase.
A minimum wage hike has widespread support among Democratic lawmakers, but some Republicans argue that a raise would hurt businesses, lead to job losses and ultimately harm the economy.
But advocates for raising the minimum wage say that an increase is long overdue. Had it kept pace with inflation since peaking in value in 1968, the federal minimum wage today would be more than $10.70 an hour, according to Matthew Hanson, campaign director for Raise Maryland.
In a state where 17 out of 23 counties have cost of living indexes that are higher than the national average, supporters of a hike say an increase is all the more critical.
Tiffany Beroid, who works as a customer service manager at Wal-Mart in Laurel, lives with her husband and two children in Prince George’s County, where the cost of living is 10 percent higher than the national average.
Beroid, 29, earns above the minimum wage, making $10.70 an hour, but she said her family still struggles with money, even with the income from her husband’s full-time job.
Beroid went from working full time to part time last year after the birth of her daughter because she wasn’t making enough money to afford child care, she said.
Her family pays $1,300 a month for their Laurel apartment.
“I know if I [were] a single mother or elderly or widowed, I wouldn’t be able to afford that by myself,” Beroid said. “And it’s not like it’s a high-end apartment with all these great amenities. It’s just a regular apartment with regular amenities.”
A member of OUR Walmart, a union-backed group that advocates for employees’ rights and a higher minimum wage, Beroid said a minimum wage hike would directly benefit many of her colleagues who make less than $10.10 an hour. But she suspects it would also affect her paycheck. As a supervisor, she said her hourly rate would likely get a boost if Wal-Mart had to start paying more entry-level workers $10.10.
Researchers at the Economic Policy Institute have a similar prediction. In its December report, EPI estimated that 140,000 Maryland workers would be “indirectly affected” by a minimum wage increase in this way, bringing the total number of affected workers to 446,000.
Prince George’s County recently voted to raise its minimum wage to $11.50 by 2017, becoming the second Maryland county to do so after Montgomery County, which has the highest cost of living index in the state. The location of both counties, which neighbor Washington, D.C., puts them in direct competition with the nation’s capital, where the minimum wage is $8.25 an hour.
But of the four states that border Maryland, none have a minimum wage above the federal level, and opponents of a raise say that a statewide increase would put Maryland’s outer counties at a competitive disadvantage. That’s one reason why some members of the General Assembly are pushing for legislation that would give individual counties the power to set their own minimum wage rates rather than having one statewide rate set by a bill like the one supported by O’Malley.
“I think we can all agree that one shoe doesn’t fit all of Maryland,” Delegate Neil Parrott, R-Washington, said. “The economy is completely different in western Maryland, say Garrett County, as compared to Montgomery County.”
Parrott and Sen. Barry Glassman, R-Harford, are co-sponsoring a bill that would allow counties to choose their own minimum wage rates, which would be enforced by the Maryland Department of Labor, Licensing and Regulation.
Parrott said a $10.10 minimum wage “just doesn’t make sense” in an area like Garrett County, where the cost of living is significantly lower than in Montgomery County and where businesses must compete with West Virginia, Virginia and Pennsylvania.
Sen. Richard Colburn, R-Dorchester, is sponsoring another, nearly identical, bill that would give the counties autonomy in deciding their minimum wage rate.
“This is a very complicated issue, and I certainly agree with [Senate] President Mike Miller … that one size doesn’t fit all, and let our counties raise the minimum wage as they see fit,” Colburn said. “Give that jurisdiction to the local government, where it belongs.”
Colburn said that while an $11.50 minimum wage might work for Prince George’s and Montgomery Counties, a rate that high would close many businesses on an Eastern Shore still recovering from the recession. He added an that an increase would be “devastating” to counties like Caroline, Dorchester and Wicomico, which border Delaware, where there is no sales tax.
Hanson said Raise Maryland remains focused on establishing a fair base rate statewide.
“If other counties, where there’s a higher cost of living, like Prince George’s County or Montgomery County, want to go higher, I think that’s great,” he said. “But that said, we’re fighting this campaign because we think that no matter where you live, if you live in western Maryland or if you live on the Eastern Shore or southern Maryland or central Maryland, and you’re working, you deserve to make at least $10.10 an hour.”