- The Enterprise
- The Recorder
There is a push at the state and national levels to raise the federal minimum wage from the current $7.25 an hour. In Maryland, Gov. Martin O’Malley (D) introduced legislation that would increase it to $10.10 an hour by 2016 and index it to the cost of living.
At least four other wage bills have been introduced during this legislative session. Prince George’s and Montgomery counties and Washing are raising their minimum wages incrementally to $11.50 per hour by 2017.
“It’s a lot bigger discussion than just trying to deal with income disparity,” St. Mary’s County Chamber of Commerce President Bill Scarafia said recently.
There are many solutions — each with its own following — to the issue. Some call for a federal mandate so the increase would be across the board. Others are pushing a state-legislated rate. Still others believe it should be left the to the market to determine what is a proper wage for hourly employees.
Del. Peter F. Murphy (D-Charles) said he is “very clear that I support raising the minimum wage. However, I would like to see that if this goes forward, that there’s really consideration given to any number of ways that we could help out small business.”
He said although he isn’t sure what could be done, “there are things that we may be able to do to relieve them of some of those things.”
Jen Armstrong, owner of Heavenly Chicken and Ribs in Dunkirk, said she could get behind some sort of relief for small business owners. The quick-serve operation employs between 20 and 28 people, with most of them starting at $7.25 an hour.
“There’s obviously a reason why we went into business — because it’s something we enjoy or think we will enjoy, but we obviously go into business to make money,” Armstrong said.
With a payroll tax, insurance costs and the yearly property tax on equipment, she said local businesses already are struggling.
“People lose sight of the idea that a business exists to make money. It’s not worth it to just break even,” Scarafia said.
Armstrong said if the minimum wage were legislatively increased, there would be changes at her establishment. In addition to working more than her usual 80-hour work week, she said, she would feel the pressure to invest in remodeling her Dunkirk storefront to include a larger, restaurant-style dining area with wait staff.
White Plains business owner Joe Namyst said he’s been preparing for a minimum wage increase since last fall, when he bought equipment for his printing business that would alleviate the need for “some of the extra handwork” and turn some work into a one-person job.
“I’d rather pay two people and give them a shot in the industry, but I saw this coming, so I made those purchases,” Namyst, who owns Quality Printers LLC, said.
The printing company employs eight people on average, and Namyst said he doesn’t typically start anyone at minimum wage.
One concern he has is that by forcing businesses to hire employees at a higher wage per hour, it would “really take away the incentive for a person like myself to hire that person at a higher rate,” he said. “It just doesn’t make sense economically for the business. Small businesses operate on a very thin and increasingly thinner profit margin, and when you start adding an extra or couple hundred to your small business” it has a profound effect.
A business’ ability to stay competitive determines how successful it can be in the market, and with a higher wage, Calvert County Chamber of Commerce President Carolyn Hart said it’s going to be difficult to keep businesses in the area.
“We’re constantly losing businesses to Texas and Florida — the businesses in Maryland aren’t competitive,” she said, explaining that a higher salary for employees is reflected in the price of that business’ goods or services.
“When you raise that, there’s no way they can work around that,” Hart said.
Del. Anthony J. O’Donnell (R-Calvert, St. Mary’s) said the Maryland General Assembly needs to be careful when looking at this issue that “we don’t put ourselves at a disadvantage to other states.” When there already are high taxes and regulatory burdens pressuring businesses to move out of the state, “this could be one more” reason for them to leave, he said.
“We don’t want to get too far out of kilter with our neighbors with respect to labor costs,” O’Donnell said.
O’Donnell also said if some employees’ salaries are increased, other employees earning more than the new minimum wage are going to expect an increase, as well.
Hart, who refers to this phenomenon as “wage creep,” said she wonders what is going to happen with those employees who might have been at a business for years and have earned their $10 per hour salary over time, when a new hire is coming in and is going to get paid $10 an hour right away.
“They’re gonna be looking at you, too, expecting an increase — people are gonna want to see that increase,” Namyst said.
With so many youth and students in positions that earn minimum wage, Hart said she’s concerned about what an increase will do to them as they are trying to find their first jobs.
Most of Armstrong’s staff are teenagers and students, she said, which is one reason why she can’t see paying some of them the proposed $10.10 an hour for an entry-level position.
“I totally understand the need for a living wage. I totally understand that every adult needs an income that they can live off of and not be at the poverty level. However, that being said, not every job that exists deserves a living wage. Washing dishes and taking out trash for me at the restaurant doesn’t deserve a living wage,” Armstrong said. “I get it that the economy is still trying to recover. I understand adults lost jobs that had living wages, and maybe had to take jobs that they never expected to take but had to take, and unfortunately, that job may not be something that pays a living wage.”
A recent study from Economic Policy Institute about the effects of raising Maryland’s minimum wage to $10.10 per hour, however, shows that the average age of the 455,000 workers in the state who would be affected is 33, and teenagers only comprise about 13 percent of those who would see a raise. The report says 86.7 percent of workers who would benefit from the increased salary are at least 20 years old, according to the report.
More workers 40 and older would benefit from a minimum wage increase — accounting for about 27.5 percent of those affected — than teens, the study states.
About 18.3 percent of those affected have less than a high school diploma, while 48.6 percent have at least some college education, an associate’s degree, a bachelor’s degree or higher, the report states.
Only 14.8 percent of the workforce affected by a wage increase are part-time employees or work less than 20 hours per week, whereas 56 percent of the workforce are full-time employees working 35 or more hours a week, according to the study.
About 23.2 percent of those affected are parents, the study states, and about 27.7 percent are married. In addition, a minimum wage increase to $10.10 per hour in Maryland would benefit 210,000 children with at least one parent affected by the increase, according to the study, and on average, the families of affected workers with children rely on those workers for nearly half of their total family income.
About 57.9 percent of those whose salaries would rise are women, the study states, though woman make up only about 50.6 percent of the state’s workforce.
According to the report, 42.5 percent of those whose salary would rise are white non-Hispanic; 33.4 percent are black; 16.5 percent are Hispanic; and 7.7 percent are Asian or of another race.
“Such an increase,” the study concludes, “would improve the well-being of hundreds of thousands of Maryland workers, the characteristics of whom dispel many prevailing beliefs about who gains from increasing the minimum wage.”