Businesses oppose Maryland minimum wage hike -- Gazette.Net


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This story was clarified on Jan. 31, 2012. An explanation of the clarification is at the bottom of the story.

Legislation that would raise Maryland’s minimum wage to $10 by 2015 from $7.25 would hurt restaurants and other businesses, business officials said this week.

Senate Majority Leader Robert J. Garagiola (D-Dist. 15) of Germantown and Del. Aisha N. Braveboy (D-Dist. 25) of Mitchellville outlined their proposal this week at a news conference in Annapolis. They said they plan to file legislation, which would raise the minimum wage to $8.25 in July, $9 in July 2014 and $10 in July 2015, in the House and Senate within the next week.

The minimum wage for employees who rely on tips also would rise, to 70 percent of the minimum wage from 50 percent.

The Restaurant Association of Maryland’s government affairs committee has concerns about raising labor costs “at a time when we’re still trying to understand what the health care law mandates will mean, food costs are increasing and the economy remains sluggish,” said Melvin R. Thompson, senior vice president of government affairs and public policy.

He said he hasn’t seen any specifics of the bill and couldn’t comment directly on it.

Garagiola called it an anti-poverty, economic development and middle-class working family bill that would pump more money circulating through the economy.

“A full-time worker earning minimum wage now can’t afford to rent a two-bedroom apartment in the state of Maryland,” he said.

“We boast that Maryland is one of the wealthiest states in the union,” Braveboy said. “Well, do you know how much it costs to live in one of the wealthiest states in the union?”

But opponents say it would result in fewer jobs and cited supporting studies. Previous hikes in the minimum wage resulted in more than 7,200 jobs lost for Maryland teenagers from 2005 to 2011, according to the Washington, D.C., think tank Employment Policies Institute. The nonprofit institute is one of several front groups created by Berman & Co., a Washington public affairs firm owned by Rick Berman, who lobbies for the restaurant, hotel, alcoholic beverage and tobacco industries, according to the Center for Media and Democracy, a nonprofit public relations watchdog group. Berman’s company was a registered congressional lobbyist from 2001 to 2007, according to U.S. House and Senate records.

“The data clearly show that wage hikes do cause job loss,” the institute says in a recent study, citing other studies by the University of California-Irvine and the Federal Reserve Board.

The Maryland and federal minimum wage ranks far below what it should be if adjusted for inflation, said Robert Lynch, chairman of the economics department at Washington College in Chestertown.

“If it kept pace with inflation the last 40 years, it would be at $10.60 an hour,” Lynch said.

Some 19 other states and Washington, D.C., have minimum wages higher than Maryland’s, which is at the federal level. Washington state’s is the highest at $9.19, while some cities, such as Santa Fe, N.M., have rates above $10. The District’s rate is $8.25.

Legislation similar to Maryland’s has been introduced in six other states, and U.S. Sen. Thomas Harkin (D-Iowa) has indicated that he’ll reintroduce a bill he filed last year to bump the federal minimum wage to $9.80 over the next two years, according to the employment institute. That bill last year attracted 16 co-sponsors, including Sen. Barbara Mikulski (D) of Baltimore, before dying.

Garagiola filed similar state legislation in 2011, which did not pass.

A campaign called Raise Maryland has formed, comprising some 20 unions, immigrant groups and Progressive Maryland, to advocate for the wage hike. At the news conference, two Baltimore-area workers, Lourdes Chaparro and Angela Devoti, said they would be helped with such a raise.

“Even though we are working hard, we don’t make enough to save for emergencies,” Chaparro, who works for a home cleaning company in Baltimore County, said on a video replay of the conference.

kshay@gazette.net



Explanation: This article was clarified to indicate when Berman & Co. was a registered congressional lobbyist.