Maryland's minimum wage increase would affect workers, business owners

Increase to be debated in General Assembly session

  • Marissa Green works at America's Best Wings and makes near the minimum wage. She heads to the cab that brings her to work.
Marissa Green works at America's Best Wings and makes… (Lloyd Fox, Baltimore Sun )
January 11, 2014|By Jean Marbella, The Baltimore Sun

At one end of the minimum wage battle, you'll find Marissa Greene in Randallstown, for whom an increase would mean not having to eat nearly every meal at the fast-food place where she works, because groceries are a luxury.

And at the other end, you'll find Bob Garner, co-owner of a regional chain of full-service restaurants, who says an increase could cost him as much as $187,000 a year at just one of his 20 locations.

Whether Maryland should raise its minimum wage above the current federal floor of $7.25 an hour is an issue that promises to dominate the legislative session that began last week in Annapolis — and have major implications for employers and employees alike.

"I miss the freedom of getting the things I need," said Greene, 40, who is making the lowest salary of her life — $8 an hour — at a chain that her boss asked her not to name. "Food is the most necessary thing, and I can't afford that."

Supporters of a wage increase, from Gov. Martin O'Malley to progressive groups, argue that the current rate leaves many hard-working people living below the poverty line. But opponents, including business and restaurant groups, say an increase could actually end up harming those it seeks to help by forcing employers to cut staff or hours, or even close down.

"Where am I going to get that [money]?" Garner muses as he makes some projections on how much a higher minimum wage would cost him.

He is sitting in a corner booth of Glory Days Grill in Glen Burnie, close to where he grew up and still lives, and just 11/2 miles from where he himself started his working career — as a 14-year-old who washed dishes at the old Murphy's Mart on Jumpers Hole Road for minimum wage.

Garner, now 57, actually has no problem with an increase in the minimum wage itself — and, in fact, all of the company's 1,450 employees earn more than the current rate.

His real concern is the rate paid to employees who work largely on tips and by law can be paid half the minimum wage, or $3.63 an hour. Employers have to make up the difference if tips don't bring their hourly wage up to at least the state minimum, but his staff makes well above that — on average, wait staff make about $14 an hour and bartenders more than $16 an hour when salary and tips are combined.

Figuring in tips

If the minimum wage increases to $10, a commonly cited target figure, those employees would get a higher base pay. Based on the total number of hours tipped employees are paid for at the Glen Burnie restaurant, he calculates such a change would cost him an extra $76,262 in a year.

But even more worrisome is a proposal that would raise not just the minimum wage, but also boost the percentage that tipped employees are paid to 70 percent, or $7 an hour. Garner makes another calculation: an extra $187,594 a year.

That issue isn't being discussed, Garner said, because the debate tends to focus on nontipped employees who make the actual minimum wage. "But that's a huge impact on a restaurant."

In his view, this means workers already making a decent amount of money are the ones who will most benefit from a minimum wage increase. Servers who now make about $13 an hour in wages and tips, for example, would make more than $16 an hour.

"Why use valuable resources to pay them even more?" Garner said.

He can live with a $10 minimum wage; raising the pay of workers such as dishwashers who make about $9 an hour would cost him an extra $23,000 a year at the Glen Burnie restaurant. "That's sustainable," he said — unlike a big jump in the tipped employees' base wage.

Garner notes that Maryland's $3.63 minimum for tipped workers is already higher than in surrounding states, which have set specific levels rather than one based on 50 percent of the minimum wage. In Virginia, for example, the minimum wage for tipped employees is the same as the federal minimum, $2.13.

Elsewhere, though, some states have higher minimum wages for tipped workers. California, for example, has a minimum wage for everyone: $8. States whose minimum wage for tipped employees is higher than Maryland's include Connecticut ($5.69 for hotel and restaurant workers), Florida ($4.91) and Illinois ($4.95).

Servers say they would welcome the extra income and see it as just compensation for contributing to a restaurant's success.

"We're the ones making money for them," said Dustin Groff, 25, a waiter at the Glen Burnie restaurant. "If we're not doing our jobs, people wouldn't come in. If we're not waiting tables, they're not making money."

Like others on the wait staff, he sees the job as temporary, something to tide him over as he considers focusing more on his other line of work, teaching martial arts and boxing at a gym. He is single, so he doesn't feel as economically strained as some of his co-workers who are supporting spouses or children.

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