Gov. Martin O’Malley made a personal plea to Maryland lawmakers Tuesday: Embrace his top legislative priority of raising the minimum wage and help more than 400,000 of the state’s low-income workers.
O’Malley (D) pitched his plan to increase the statewide minimum from $7.25 an hour to $10.10 by 2016, telling a House committee that doing so would not produce “cataclysmic repercussions,” as some business groups and other opponents fear.
“That’s not how the economy works,” O’Malley testified to the House Economic Matters Committee, the first of two legislative panels he is scheduled to address this week. “When we make our middle class stronger, that’s what grows the economy. . . . Anyone who works and plays by the rules should not have to raise her children in poverty.”
Twenty-one states and the District have minimum wages higher than Maryland, which uses the federal standard.
Most state Democrats back the idea of an increase, but the task has been complicated by the recent passage in Montgomery and Prince George’s counties of local legislation requiring workers there to be paid $11.50 an hour by 2017.
There is also unease about aspects of O’Malley’s plan, including a provision that would peg future statewide increases to inflation. Another proposal would require employers in Maryland to pay workers who receive tips much higher wages than those in neighboring states.
“It would crush the restaurants,” said James King, a former Republican delegate who owns J. King’s Steak & Seafood Restaurant in Gambrills.
Del. Joseph J. “Sonny” Minnick, a member of the House Economic Matters Committee and a former tavern owner, also questioned the legislation.
“We’re sitting here talking about how good it is for workers,” Minnick (D-Baltimore County) said. “But how about the small business guy who works his tail off every day?”
O’Malley’s bill calls for the statewide minimum wage to rise to $8.20 an hour in July, $9.15 an hour in July 2015, and $10.10 an hour in July 2016. Counties could set a floor higher than the state’s, as Montgomery and Prince George’s have.
A competing Republican bill heard by lawmakers Tuesday would leave counties free to decide what the minimum wage should be. That bill partly reflects concerns that a $10.10 minimum would be unfair to rural areas, including the state’s Eastern Shore.
Senate President Thomas V. Mike Miller Jr. (D-Calvert), whose chamber is scheduled to hear testimony on O’Malley’s bill Thursday, declined to say how closely final legislation would resemble what the governor has proposed.
“There are opinions all over the place here in the Senate,” Miller said. “At this point in time, I couldn’t predict what’s going to happen.”
Members of the House committee have been hit with competing studies about how raising the minimum wage would affect Maryland’s economy.
A study released Monday that was commissioned by the pro-business group the Maryland Foundation for Research and Economic Education, predicted that raising the minimum wage to $10 an hour would result in the loss of 11,502 jobs, increase the price of consumer goods and weaken the state’s competitive position.
But Douglas Hall, an economist with the liberal Economic Policy Institute, who testified alongside O’Malley on Tuesday, questioned the methodology of the study. He argued that a minimum-wage increase would strengthen Maryland’s economy because low-wage workers would have more money to spend on goods and services.
About 67,000 workers in Maryland earned the minimum wage or less in 2012, according to the U.S. Bureau of Labor Statistics.
The bill would affect a far greater number of workers, however, since many more earn less than $10.10 an hour. An analysis by the Economic Policy Institute that was cited by Maryland legislative analysts put that figure at 304,000.
In addition, 151,000 Marylanders would be likely to get raises as well, according to the institute’s figures, because they make just more than the new minimum wage and employers would want to keep their wage “ladders” intact.
Del. Kelly M. Schulz (R-Frederick) said she and other members of the committee are being asked to gamble on which study is best.
“Each of us in this room,” Schulz said, “has to ask ourselves, ‘How many [lost] jobs is too much?’”
Tuesday’s hearing also drew testimony from two Democrats seeking to succeed O’Malley after this year’s election: Lt. Gov. Anthony G. Brown and Attorney General Douglas F. Gansler.