MIDDLE RIVER, MD. — The minimum wage hike being debated by lawmakers in Annapolis would have real repercussions here at the Carroll Island shopping center, where nine of 20 storefronts are shuttered and a few dollars — or cents — makes a big difference.
Rebecca Pentz-Jones, a mother of four who earns $7.95 an hour at the Dollar Tree, would love to be paid $10.10, the amount proposed by Gov. Martin O’Malley (D) and applauded by President Obama. But she worries that employers would cut positions or hours to offset the additional labor costs, leaving some workers with less when bills are already so hard to pay.
Ken Hoffman doesn’t know how he would absorb even a small increase in payroll at the hardware store he has owned for 40 years. Sales are falling steadily. More and more, customers buy a few screws from him, then head to a big-box store for larger purchases.
“People have got to realize that prices are going to go up” if the minimum wage increases, Hoffman said. Eventually, he added, “these jobs are all going to go away.”
The wage hike is O’Malley’s top legislative priority for his last year in office. Many thought it would be a painless election-year sell in liberal Maryland, especially after Montgomery County, Prince George’s County and the District approved an $11.50 minimum wage late last year.
But passing the bill has been anything but easy — and with just 10 days left in the legislative session, it is still unclear which workers will get a wage increase and when it will take effect. Key lawmakers are worried about killing jobs in communities scarred by years of recession and economic decline.
“We don’t just pass things because they’re popular,” Senate President Thomas V. Mike Miller Jr. (D-Calvert) said. “My chief concern is making sure that what we pass has a positive effect on the economy and is not the cause of people being laid off.”
The House of Delegates carved out an unusual number of exceptions to O’Malley’s bill before passing it — no wage hike for the state’s lone drive-in movie theater, seasonal amusement parks, or cafes with annual income below $250,000. A proposal to boost base pay for tipped workers — whose minimum wage is lower than for employees who don’t get tips — was rejected. Delegates slowed implementation of any wage hike by six months.
Now the Senate is weighing whether to extend implementation much further, perhaps as long as five years. And a key senator has delayed the bill until O’Malley agrees to increase wages for workers who care for the developmentally disabled and are paid by the state.
Senate leaders say they will pass a wage hike by April 7, the last day of the session. What the bill looks like will be a test of the clout O’Malley still wields in Annapolis as he prepares for a possible White House run. But it will also reflect the challenge of boosting stagnant wages without crippling an employer’s bottom line.
“I feel like I’m on a battleground between trying to help a person make a living and trying to save my small businesses,” said Sen. Katherine A. Klausmeier (D-Baltimore County).
The tension plays out every day in Middle River, a town of 25,000 about a 20-minute drive from downtown Baltimore. Many live in tightly packed rowhouses or a mobile home park; a few own million-dollar homes on the river. Median household income is $53,158, significantly less than the state-wide median of $72,999.
The shopping center includes the ghosts of a tanning salon, a clothing store and a diner. The shop selling model cars and airplanes is still open, along with a custard franchise, a liquor store and — near the end of the row — family-owned Carroll Island Hardware.
In the early 1990s, the store had a staff of 15, owner Ken Hoffman said. Then a Home Depot opened. Then a Lowe’s. And a Wal-Mart. Now, there are five employees, including Hoffman, 72, and his son.
“I have charts in the back — it’s $10,000 to $20,000 less every year,” Hoffman said. “I’m on the verge of closing. We are always on the verge.”
Next door to the store is the “Living Fit Club,” a 24-hour gym that has no on-site employees at all. A recorded voice welcomes customers, who swipe a magnetized card to gain access to the weight machines and aerobic equipment.
At Lee Marie’s Restaurant, a few storefronts up, owner Robert Bowles agrees that times are tough — especially for low-wage workers. He supports O’Malley’s wage hike and can’t believe there are still businesses of any size that pay their workers $7.25 an hour. His food runners, usually high school students, start at about $8 an hour. Other employees make $10 to $12. Raises come within two months of their start date.
“When you’re a mom-and-pop shop, you know your employees,” said Bowles, 38. “It’s not like at Wal-Mart or those corporate places where all they know is an ID number. They don’t know who you are. They don’t care if you leave.”
The nearby Dollar Tree is one of more than 4,600 stores in a Virginia-based deep-discount chain that has seen net sales more than triple in the past decade as financially strapped families look to save wherever they can.
Employees often start at minimum wage, and raises are hard to come by. Pentz-Jones, 32, who stocks the freezer and refrigerator section, has seen her pay increase by just 70 cents an hour after four years. Her husband works for a merchandising company setting up grocery store displays. Their four children range in age from 5 to 13.
“We make enough to get by, but not enough to save,” Pentz-Jones said. “It seems like whenever we save a little, the car breaks down.”
Pentz-Jones said she has tried taking community college classes to boost her earning potential. But the money she could earn with an associate’s degree never seems worth the time and money she would need to invest.
Standing outside the store one afternoon as a timer in her pocket ticked off the minutes left of her break, she said a boost in the minimum wage would help — a little. But she has heard that a mandated increase would force small businesses to close and jobs to disappear. “I have mixed feelings on it,” she said.
Well before lawmakers gathered in Annapolis in January for their annual legislative session, there were signs of the challenges a minimum wage bill would face.
“Yes, it will benefit some people, but at the expense of others,” Del. Dereck E. Davis (D-Prince George’s) said back in September. He said he was “very concerned” that a wage increase “could result in the elimination of jobs.”
Davis chairs the Economic Matters Committee, which had jurisdiction over the bill in the House and added many of the exemptions in the current version. Sen. John C. Astle (D-Anne Arundel), vice chairman of the Senate Finance Committee, said those changes added to an already surprising number of exemptions in current minimum wage law.
“It gets very confusing,” Astle said. “Sometimes it makes me wonder why we even have a minimum wage.”
A poll conducted by The Washington Post last month found that residents of Prince George’s County favored a minimum wage of $10.60 an hour, while those in Montgomery County preferred $9.70. Rural parts of the state were lower, at $9.10. On average, Marylanders say the state’s minimum wage should be $9.58. Democrats wanted a wage of $10.30 an hour, compared with $9.40 for independents and $8.20 for Republicans.
Among those staunchly against any increase is D. Edward Vogel, owner of Bengies drive-in in Middle River. A registered Republican, he said the government should not tell businesses how much they should pay — but employers should pay as much as they can afford. Lately, he acknowledges, that hasn’t been as much as he would like. All of his mostly teenage employees start at $7.25 per hour. Hard workers see a raise within a few weeks, plus another if they come back for a second summer.
“Should everyone be paid the same?” Vogel said. “Does everyone work the same? Does everyone have the same amount of loyalty? Where’s my ability to regulate that?”
Del. Richard K. Impallaria (R-Baltimore County) amended O’Malley’s bill to exempt drive-in theaters — which in reality means Bengies, located in Impallaria’s district and the only drive-in left in the state. Vogel said he was unaware of the exemption until a reporter informed him.
His relief at not having to pay more once the bill passes evaporated quickly as he contemplated a future in which he would try to start his employees at $7.25 an hour, while all around him businesses would pay at least $10.10.
“Sooner or later,” he said, “it’s going to hit me.”
Scott Clement and Peyton Craighill contributed to this report.