Strosnider's Hardware is a family-owned business in Montgomery County preparing to open shop in downtown Silver Spring, a faded commercial center in the midst of a multimillion-dollar renovation financed mostly by public funds.

Neighborhood residents have been clamoring for a place to buy a hammer for decades, and many were thrilled when the company announced it would open its third store in Montgomery. But now management at Strosnider's is having second thoughts: Impending county legislation could force the company to raise the pay for half of its 115 employees if it expands.

The bill would essentially double the minimum wage -- to $10.41 an hour -- for businesses that benefit from public money either through county contracts, tax breaks or, in the Strosnider's case, as tenants in a publicly subsidized building. Known as living-wage legislation, the concept has champions among entry-level clerks and stock workers at Strosnider's as well as national advocates for the poor. But company officials say it could make the move to Silver Spring too expensive because the bill, as envisioned, would apply to employees in all of its Montgomery stores.

"I frankly foresee not going in," said Bill Hart III, general manager of the company's Bethesda store. "This is going to be a very sticky point for us."

The Montgomery County Council is scheduled this month to introduce living-wage legislation that would apply to more than 1,600 county contractors and countless firms touched by public funding in less obvious ways. As envisioned, it would affect businesses as large as Marriott International Corp., which accepted millions of dollars in tax breaks to remain in the county, to storefront offices in buildings developed with public money.

Already a sharp ideological battle is emerging over the measure, among the broadest in the nation because it reaches beyond contractors to companies that receive economic development incentives. At the core of the debate is a question Montgomery politicians have struggled with since voters installed a more activist council in November: What role should government play to help the poor during prosperous times?

The measure is part of new efforts by national social-service advocates since welfare reform began pushing Americans away from public assistance to low-wage jobs three years ago. It also comes at a time in Montgomery when ethnic diversity is remaking many suburban neighborhoods and increasing local poverty, as measured by the percentage of poor children in public schools and the number of workers in low-wage jobs.

The bill is intended to help a class known as the working poor, a group numbering 80,000 people in Montgomery and growing. Some of them are among the 9,897 Montgomery residents who have left welfare rolls for work since 1996 but who make an average of only $7 an hour in their new jobs. A family of four falls into that category with an annual household income of less than $25,000.

"We are now learning that we have created a whole subculture of people who are hard-working but for whom work is not paying," said Charles Short, the county's director of health and human services. "We have an obligation to make them self-sufficient. Getting them off welfare helps achieve the federal mandate, but it fills no moral goal."

Short has not taken a position on the legislation. But living-wage supporters, including labor organizers and advocates for the poor, say the regulation is a way to ensure that businesses benefiting from public money pay their employees enough to make ends meet. The bill would require companies to pay workers at least $21,710 a year -- the level at which a family of four no longer qualifies for food stamps. The immediate result would be a pay raise for about 6,000, but advocates hope other companies will raise entry-level wages to remain competitive.

"This is a way for government to use its leverage to bring about social justice," said council member Philip Andrews (D-Rockville), who is drafting the bill. "If you want government money, you should adhere to certain standards to pay workers a wage that lifts them above poverty. No one is forcing you to take it."

Opponents of the bill, mostly business groups and politicians opposed to government meddling, say companies doing business with the county will pass on higher personnel costs to taxpayers. They say the bill is particularly burdensome by targeting companies that receive economic development benefits, including potential tenants of the $321 million Silver Spring redevelopment project.

"What I'm looking at is something that applies to the contracts -- someone who actually works for the county," said County Executive Douglas M. Duncan (D), who is wedged between labor and business on a delicate political issue. "If the bill applies to any kind of economic incentive, that could be a real problem for us."

During his tenure, Duncan has increased money to help poor families pay for child care, health insurance, transportation and rent. Now, Duncan has asked aides to examine whether the county could offer tax breaks for low-income families, usually the purview of the state and federal government. This fall, he plans to convene a conference on the plight of the working poor.

In the meantime, living-wage organizers hope to make Montgomery the second jurisdiction in Maryland to pass the law. Four years ago, Baltimore became the first in the country to approve such legislation, albeit in a narrower form.

The Montgomery campaign is taking place among the squat, brick apartment buildings and parched courtyards of Piney Branch Road and other shabby inner-suburban boulevards. Labor organizers and recent college graduates are organizing janitors and warehouse workers, maids and gardeners in support of the bill, which is scheduled for introduction June 22.

Ana Perez and her husband, Herman, have signed the petition in the hopes of moving into a two-bedroom apartment so their 4-year-old son can have his own room. So has Radhames Deleon, a janitor at Goodacre Apartments who says a raise from $7.60 an hour would provide him money to attend school, learn English and become a police officer.

"If I was in my own country, I would be at the university studying for a career in medicine," said Deleon, a cheerful 25-year-old Dominican immigrant. "Maybe I won't be a doctor here. But with more money, I could study to be something."

Several county contractors said the bill would help them because they could reduce turnover in a tight labor market by paying more and essentially passing on the cost to the county. A 1998 study by the the Economic Policy Institute found that Baltimore's contract costs have increased 1.2 percent under living-wage legislation, less than the rate of inflation.

"If I bid a job for $10 an hour, and I have to pay $10.41, I will pass that on to the county," said Julio Arce, general manager of L&S Janitorial Contractors, a Gaithersburg company that cleans about 40 county buildings. "I will be able to attract better employees."

Hart, the Strosnider's general manager, said the bill would increase his personnel costs by an estimated $250,000 a year. He said he would have to either hire fewer people or limit employee overtime, a lucrative source of income for hourly workers.

George Mensah, a 46-year-old Strosnider's stock person, supports a wife and four children on less than $20,000 a year. The immigrants from Ghana live in a two-bedroom apartment in Wheaton and pay $740 a month in rent. Last year, he sent his oldest daughter to live with his parents in Ghana so she could attend college there because he couldn't afford local tuition.

"The money I make goes to bills and the rent. I only have $50 left after that," said Mensah, who would welcome more money but is concerned the raise could cost him extra hours. "The only way I can survive is working overtime."

CAPTION: Radhames Deleon, a janitor in Montgomery County, believes a higher wage would allow him to study to improve his career prospects.

CAPTION: Radhames Deleon, 25, a janitor for an apartment complex, says a higher wage would enable him to learn English and to study to become a police officer.

CAPTION: Ana Perez and her husband hope a higher wage would allow them to move to a two-bedroom apartment so their son could have his own room.