Montgomery County is vowing to protect its minimum wage hike, even as a newly released report by a pro-business group concluded that a statewide increase could be harmful.
The Montgomery County Council is keeping a close eye on possible efforts in Annapolis to limit whether counties can increase minimum wages, as Montgomery and Prince George’s counties did in November, Council President Craig L. Rice said Monday.
A report released Monday by the Maryland Foundation for Research and Economic Education said a minimum wage increase would hurt local economies.
The report identifies four drawbacks to raising the minimum wage in Maryland: an increase in the price of consumer goods, a decline in employment and personal income, a decline in real estate values and increased competition for jobs with other states.
But, the consequences of increasing the wage may not be immediately apparent.
“Changes to the minimum wage rate in Maryland can have impacts over a longer period ... and may be difficult to measure before the passage of five or ten years,” the report stated.
If the legislature approves a statewide minimum wage of $10 an hour, the state would lose about 11,000 jobs, the report said.
According to the Maryland Foundation for Research and Economic Education report, as of 2012, about 59,000 workers in Montgomery County make $10 or less per hour.
The Montgomery council voted 8-1 in November to raise the county’s minimum wage to $11.50 an hour by 2017.
Prince George’s County and Washington, D.C., also have approved increases in their minimum wages to $11.50 an hour. The District’s bill would put the increase into effect by 2016.
During debate over the Montgomery bill, Rice — council vice president at the time — urged his colleagues to wait until January to get a better idea of what statewide legislation would emerge during the General Assembly’s session.
When that push for a delay failed, Rice (D-Dist. 2) of Germantown joined with the majority in voting for the bill.
Councilman Philip M. Andrews (D-Dist. 3) of Gaithersburg opposed the measure, saying that acting ahead of the state would leave the county “flying blind.”
Throughout the debate over the minimum wage increase in the three Washington-area jurisdictions, rumors swirled that the General Assembly would act to revoke Montgomery and Prince George’s ability to independently raise their wage as part of a state-wide bill.
In a statement following the passage of the bill in Montgomery, Senate President Thomas V. Mike Miller Jr. said he believes a uniform wage throughout the state would be most effective, but Montgomery was within its rights to pass its own increase.
Conservative delegates in Annapolis have backed a bill by Del. Neil Parrott (R-Dist. 2B) of Hagerstown to permit each county to set its own minimum wage.
Blaine Young (R), the president of Frederick County’s Board of Commissioners and a small-business owner, said an increase would have unintended consequences.
“The bigger concern is obviously, with a teetering economy, it’s an added pressure and burden on small businesses ... that many think they can’t afford,” he said.
If the state raises the minimum wage, Young said, workers who earn a wage just above the minimum may not get their anticipated raises.
Young said people commute into Maryland from Pennsylvania, West Virginia and Virginia, but multiple factors may push their businesses over the line. Young cited the gas tax and stormwater management fees, in addition to increased minimum wages, as reasons for a business or resident to move out of Maryland.
Several bills have been filed in the General Assembly with different provisions to raise the state’s minimum wage.
Gov. Martin O’Malley (D) has backed a bill supported by activist group Raise Maryland that would increase the minimum wage to $10.10 per hour by 2016, index the wage to the rate of inflation and increase wages for tipped workers from 50 percent to 70 percent of the minimum wage.
In Annapolis, members of House Economic Matters Committee spent hours Tuesday hearing testimony on increasing the minimum wage.
Lt. Gov. Anthony G. Brown (D) told members of the committee that a wage increase would put more money in workers’ pockets than raising the state’s Earned Income Tax Credit, a program that benefits low-income workers.
At the state’s current minimum wage of $7.25 per hour, a full-time worker would earn about annual $15,000, a poverty wage. At $10.10 per hour, that same worker would earn about $20,000 each year.
Opponents say the mandate will cost jobs as small businesses either fold or cut jobs.
Rice, a former state delegate, said it’s too early to tell which measure will become the one that legislators vote on.
Rice said during a briefing with reporters Monday that he believes the minimum wage debate will go down to the last days of the session in early April.
“For us, this is just going to be something that we’re going to have to watch and wait,” Rice said.
Rice said a difference of about $1 between the state’s and Montgomery’s wages is OK, but a bigger gap could put Montgomery businesses at a competitive disadvantage.
Staff writer Kate Alexander contributed to this report.