Don't minimize minimum wage [Editorial]

Our view: Don't gut proposal to gradually raise Maryland's minimum wage with a 'training wage' exemption or a measly $8.25 statewide rate

December 19, 2013

Ever interested in the region's troubled youth — although usually in the context of a police crackdown on them — Del. Pat McDonough says he wants Maryland to adopt a "training wage" of $7.25 an hour for businesses of 100 workers or fewer. If the Maryland General Assembly raises the state minimum wage to the proposed $10.10 next year as many hope, he believes a state training wage would encourage businesses to hire more entry-level workers, as they wouldn't have to be paid the minimum wage until they've been on the job for six months.

Why the Republican delegate representing portions of Baltimore and Harford counties doesn't simply propose an even lower wage — call it the "youth internship" wage — isn't clear. Of course, it might have something to do with the fact he's not proposing an exemption for young people or first-time hires only, but essentially for all who walk in the door. Apparently, the 50-year-old laid off steel fabricator might as well earn the same poverty-level wage at the local fast-food joint as the high school junior looking to buy his first car.

Too bad for the delegate the federal minimum wage would seem to prevent going even lower. A so-called "opportunity wage" of at least $4.25 can be imposed under the Federal Labor Standards Act, but only for employees under age 20 and only for 90 days and not to displace any other worker. Maryland also currently offers a slew of minimum wage exemptions — for workers under 16 working less than 20 hours per week, agriculture workers, those who earn tips, etc.

The problem with the current $7.25 an hour wage is actually much simpler: It isn't your father's minimum wage. To offer the equivalent of a minimum wage of 40 years ago, it has to be raised to something in the neighborhood of $10 per hour. That's why Maryland and other states have such an impetus to move in that direction, particularly now that the economy appears capable of sustained growth and is producing record profits.

Creating a phony-baloney training wage is merely a transparent effort to make any boost in the minimum wage at the state level meaningless. It's particularly rich (if you'll pardon the expression) to hear it come from a GOP delegate who has spent endless hours telling his radio listeners that Obamacare is causing employers to turn from full-time to part-time hiring. Apparently, government regulations that encourage only underpaid seasonal hiring are just fine.

Let's get real. The proposed $10.10 an hour minimum wage isn't going to destroy large numbers of jobs. At least that's not been the experience when the minimum wage has been increased in the past in Maryland, and it's not been the story in other states either. While it might raise payroll costs for some businesses, it also produces an off-setting benefit for the economy as businesses face less turnover and workers spend the money they've earned, which, in turn, creates new jobs. Allowing workers to earn enough so that they don't need food stamps or other forms of government assistance ought to be appealing to Republicans as well.

Meanwhile, the biggest obstacle to right-sizing Maryland's minimum wage is a Democrat, specifically Senate President Thomas V. Mike Miller. While advocates are pushing for a minimum wage raised to $8.20 per hour next year, $9.15 an hour in 2015 and $10.10 in 2016 and tied to inflation thereafter, Senator Miller said recently he'd like it raised to $8.25 an hour and then leave it to individual jurisdictions to decide if they want it any higher than that.

He's right that local governments should be able to raise it higher (Montgomery and Prince George's counties have already taken that action) but wrong to set the standard so low. The cost of living may vary by county, but there's no place in Maryland where $8.25 an hour is equivalent to the federal minimum wage offered a generation ago. Why is the minimum wage that was regarded as reasonable when Richard M. Nixon was in the White House suddenly unreasonable today?

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