Governor urged to sign pay bill

Minority business groups press for `living wage'

Ehrlich had vowed to veto it

May 04, 2004|By David Nitkin | David Nitkin,SUN STAFF

Small businesses would gain if Gov. Robert L. Ehrlich Jr. allows Maryland to become the first state in the nation with a "living wage" requirement, minority business leaders said yesterday in urging the governor to reconsider a pledge to veto the initiative.

A minimum $10.50 wage for employees participating in state contracts would provide more money for lower-class workers to spend, boosting the economy and offsetting costs associated with the proposal, said business group leaders who gathered in Annapolis to support the legislation.

"When these workers take their paychecks home, they will spend money in the local community," said Arnold Jolivet, president of the American Minority Contractors and Business Association. "There is no downside to the living-wage bill."

The General Assembly passed the living-wage bill in its final hours before adjourning last month, although Ehrlich said several times that he would veto it - calling it bad for business.

"The governor sees it as poor economic policy that could lead to a loss of jobs," said Henry Fawell, a spokesman for Ehrlich. "Many contractors could be forced to decrease their work forces to pay for skyrocketing wages."

Progressive Maryland, one of the advocacy groups that initiated the proposal, says that if Ehrlich examines the evidence, he will find that the living wage would benefit the state's economy.

"We are urging this governor to change what appears to be his attitude," said David Paulson, a spokesman for Progressive Maryland, a coalition of labor, religious and community organizations. "We need a hero for working people."

The state Department of General Services grossly overestimated the cost of the proposal, Paulson said, pointing to recent correspondence from legislative analysts. Testifying against the bill in March, General Services officials said the proposal would increase the cost of janitorial services alone by $14.7 million.

But in an April 28 letter to Del. Herman L. Taylor II, a sponsor of the legislation, legislative analysts said: "It should be noted that the bill specifically excludes the contracts on which the $14.7 million estimate is based."

Paulson said the plan could have virtually no cost to taxpayers.

The living-wage bill would apply to prime contractors with $100,000 in business with the state, or subcontractors doing $25,000 in work and would exclude not-for-profit organizations. As a result, only about $180 million of the state's $889 million in service contracts would be affected, said Tom Hucker, executive director of Progressive Maryland.

About 100 cities and counties nationwide have implemented living-wage laws, designed to require contractors to pay sufficient wages to allow an employee to afford housing, food and clothing and other living expenses.

A living-wage law took effect in Baltimore in 1995, and a study by researchers at the Johns Hopkins University found that the cost of service contracts rose by 1.2 percent as a result, less than the rate of inflation.

Minority business owners support the bill, said Chung Pak, a representative of the League of Korean Americans, because many sympathize with the plight of the working poor.

"They themselves have had to work their way up to owning businesses," Pak said.

Taylor, the Montgomery County delegate and small business owner who sponsored the bill, said businesses have a responsibility to their communities to pay decent wages.

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