Raising the standard

Our view: Maryland deserves a minimum wage law that lifts families out of poverty and provides a meaningful economic boost to all

January 20, 2011

A proposal to raise Maryland's minimum wage from $7.25 to $10 by 2013 is in danger of getting the kind of lukewarm reception lawmakers in Annapolis usually reserve for root canals or ethics legislation. Leaders are promising to "take a look" at whatever crosses their desks on the subject — but not much more than that.

It doesn't help, of course, that some in the business community are already calling the measure a jobs killer, their reflexive response to all minimum-wage proposals. But it's a particularly compelling story line in 2011 when Maryland, like the rest of the nation, is still mired in a sluggish economic recovery and creating jobs is a top priority.

And while opponents will no doubt trot out employers who will swear in committee hearings that they will cut jobs if they are forced to raise wages, history shows that on the macroeconomic level — statewide or nationally — the minimum wage has little or no impact on employment rates. As of Jan. 1, 17 states require minimum wages above the federal $7.25 an hour, and more than half — Alaska, Colorado, Connecticut, Maine, Massachusetts, Montana, New Mexico, Vermont, and Washington — report unemployment rates lower than the national average, according to the most recent statistics available.

That shouldn't surprise anyone. The U.S. has had a minimum wage since the Roosevelt administration, but it's had a checkered history. In the 1960s, it came closest to making a real dent in the nation's poverty level, guaranteeing wages the 2010 equivalent of close to $10 per hour. But inflation has too often been allowed to overtake it, and today the vast majority of the work force earns more than the federal minimum wage.

Employers may not like anything they perceive as adding to their costs, but having 45 million Americans living in poverty adds to everyone's costs, including businesses large and small. When people are given the opportunity to earn a decent wage — that is, enough to support themselves and their families — the need for costly taxpayer-funded social safety net programs diminishes.

That doesn't mean that Maryland businesses should be forced to pay $10 per hour tomorrow, or this summer, or next year — or even for every classification of employee. But it's not unreasonable to set a timetable now for a gradual increase over several years and perhaps to permanently provide some annual inflation adjustment.

The benefits of such a move can be substantial. Several years ago, the Maryland legislature approved a living wage law that ensures most state contractors and subcontractors in the Washington-Baltimore area have to pay wages of $12.28 per hour. The impact on the state budget has been negligible, but it's surely been a help to families struggling to stay afloat on modest wages.

Lawmakers adopted a state minimum wage in 2006, when Robert L. Ehrlich Jr. was governor, but it was quickly overtaken by the federal standard. Still, it demonstrated that lawmakers recognized the need for a relevant state standard — and that they had voter sympathy behind them. Mr. Ehrlich, who vetoed the bill, subsequently became a one-term governor.

Call it "trickle up" economics, but when people earn a decent wage, they spend more money and businesses make more sales. It's the kind of economic stimulus that political conservatives ought to endorse (and have in places like Arizona and Montana). Such clear benefits make a minimum-wage increase more relevant in tough economic times than ever.

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