Minimum Wage Hike Will Bring Higher Expenses

Minimum Wage Hike Will Bring Higher Expenses

If it feels like Maryland just increased its minimum wage, that’s because it has annually for the last four years. From 2015-2018, minimum wage jumped from $7.25 an hour to $10.10 an hour as part of a legislative package approved in 2014.

With that increase now in place, the Maryland legislature seems intent on approving a similar phase-in plan ultimately boosting the so-called “living wage” to $15 an hour by 2025. If passed, as expected, that means over 10 years the minimum wage rate in Maryland will more than double. That’s not a sustainable increase for businesses of any size and will simply result in costs to eat out and buy groceries, for example, increasing for consumers.

While economic inequality and social justice issues merit attention, Maryland lawmakers need to understand this wage increase coupled with last year’s paid sick leave bill ramifications will severely hurt existing businesses and hamper economic development.

Throughout this session, and for years truly, we have been wondering whether state lawmakers truly care what their constituents think. We are generally referring to these decision makers, as surely there are individuals who do want to stay in the good graces of those folks who put them in office. However, these continued decisions that run afoul of what appears to be the majority opinion of the electorate make us wonder how and why lawmakers are coming to these decisions.

A recent poll conducted by Gonzales Research and Media Services revealed 43 percent of registered voters in Maryland “strongly support” boosting minimum wage to $15. However, according to the same poll, just 28 percent “strongly support” the increase if it means paying higher prices for goods and services as well as meals. Businesses will not simply accept a reduced net profit and will inevitably pass their rising costs on to their customers. According to the Restaurant Association of Maryland (RAM), just 12 percent of those polled would strongly favor the increase if it resulted in the loss of entry level jobs for low-skilled workers, while 70 percent would oppose the law if low-skilled jobs are lost.

Due to its liberal tax policies, expensive property and poor economic development incentives, Maryland is known as an anti-business state. That plays out routinely as Maryland is often passed over by neighboring states for large commercial contracts and future business home offices.

Maryland’s current minimum wage of $10.10 is already higher than neighboring states Delaware ($8.25), Virginia ($7.25), West Virginia ($8.75), Pennsylvania ($7.25) and New Jersey ($8.60). Businesses are already at a competitive disadvantage even without this planned increase.

With the House of Delegates already approving a $15 an hour minimum wage by 2025, the Senate now gets its chance to review the bill. Pundits expected the new wage legislation to pass easily, although local officials railed against the bill yesterday. We hope their efforts are not an exercise in futility, but recent history confirms they will be.

About The Author: Steven Green

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The writer has been with The Dispatch in various capacities since 1995, including serving as editor and publisher since 2004. His previous titles were managing editor, staff writer, sports editor, sales account manager and copy editor. Growing up in Salisbury before moving to Berlin, Green graduated from Worcester Preparatory School in 1993 and graduated from Loyola University Baltimore in 1997 with degrees in Communications (journalism concentration) and Political Science.