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Skeptics of $15 Minimum Wage Push Regional Carve-Out

Del. Neil Parrott (R-Washington). Photo by Danielle E. Gaines.

As lawmakers consider whether to adopt a $15 minimum wage, some are also asking whether that figure is needed everywhere in Maryland.

“Garrett County is not Montgomery County. They are not similar in any way, shape or form. They’re completely different,” Washington County Del. Neil Parrott (R) said Thursday. “And imposing a $15 minimum wage in Garrett County or Somerset County on the Eastern Shore, what we’re going to see is people moving from good paying jobs, good businesses that are forced to shut down, because they simply can’t afford it.”

Parrott, who is introducing his own bill to set minimum wage rates county-by-county, was joined by others Thursday, who said that some of the state’s low-income counties simply wouldn’t be able to adjust to the increased wages.

The Greater Ocean City Chamber of Commerce opposed the Fight for 15 bill (House Bill 166/Senate Bill 280), saying that it would “essentially devastate” the area’s rural, small and seasonal businesses.

“Being located on the Lower Shore puts us at a tremendous disadvantage. We have one of the highest unemployment rates and one of the lowest living wages in the state; we simply cannot afford to pay the same wages for entry level jobs as Montgomery County,” President and CEO Melanie A. Pursel wrote lawmakers.

But supporters of a statewide “Clean 15” bill – without carve-outs for certain industries or regions – said such logic was flawed.

“A state minimum wage that sets lower rates for certain regions would incentivize workers to leave rural communities to seek higher paying jobs in urban areas, making it harder for our rural businesses to hire and retain employees,” said Alissa Barron-Menza, vice president of Business for a Fair Minimum Wage, a coalition that includes members from Frederick County to the Eastern Shore.

For a higher wage to have a broader economic impact, the statewide effect of increased consumer spending must be felt, Barron-Menza said. A regionalized minimum wage “would lock in the current poverty of regions where communities are struggling,” she told the Senate Finance Committee on Thursday.

Parrott’s bill would abolish the state’s current $10.10 minimum wage and allow each Maryland county to set its own minimum wage, with the $7.25 federal minimum wage rate as a baseline.

Parrott held a news conference Thursday, pre-empting his own bill hearing scheduled for early next month, when it’s likely one or both chambers of the legislature will already have moved on a $15 minimum wage bill.

He said his bill is especially necessary in counties that border other states.

Parrott said the larger counties want to impose a $15 minimum wage across the state so they’ll be insulated from businesses jumping over county lines.

“But Washington County’s not insulated. It’s 12 miles from the Pennsylvania line to go through Maryland to the West Virginia line, and of course, Virginia’s right next door,” he said.

In Pennsylvania and Virginia, the current minimum wage is at the federal rate of $7.25. Delaware and West Virginia have a minimum wage of $8.75.

Parrott pointed to past statements of support for a local or regional minimum wage by Senate President Thomas V. Mike Miller Jr. (D-Calvert) – who, like House Speaker Michael E. Busch (D-Anne Arundel) has embraced the $15 legislation this session.

Parrott also introduced a county minimum wage bill – which failed to move forward – in 2014, the last time state lawmakers voted to increase the state’s minimum wage.

Maryland Commerce Secretary Kelly M. Schulz wrote a letter to lawmakers earlier this month urging consideration of regional or county wage rates.

“The central premise of the Fight for $15 movement is that all laborers should earn a living wage, but a living wage is not $15 per hour everywhere,” Schulz wrote. “There are regional differences in labor markets and cost of living. Wages vary greatly across the State.”

But Donald C. Fry, president and CEO of the Greater Baltimore Committee, a regional business group, said he “strongly believes that is impractical and inconsistent with competitive principles to allow individual counties and municipalities to enact such legislation, thereby creating a patchwork of different rules and standards throughout the state.”

The Greater Baltimore Committee’s support for an increased minimum wage is contingent upon prohibiting counties and municipalities from setting minimum wages outside the state standard and extending the time for small and mid-size employers and nonprofit organizations in implementing the increase.

In 2017, the Baltimore City Council voted to increase the city’s minimum wage to $15, but Mayor Catherine E. Pugh (D) vetoed the measure, saying the city would be at a competitive disadvantage if surrounding counties didn’t raise their minimum wages. She has since joined calls for a statewide increase to $15 and testified in favor of the bill on Thursday.

In her note to lawmakers, Schulz seized on Pugh’s veto to press her case.

“Like Mayor Pugh, the committee should consider the extent minimum wage increases will impact the competitiveness of the state as a whole with neighboring states,” she wrote.

Widespread support in poll

The Fight for 15 bills from Del. Diana M. Fennell (D-Prince George’s) and Sen. Cory V. McCray (D-Baltimore City) would allow any county to increase the minimum wage above the state standard.

A Goucher Poll conducted earlier this month found that 67 percent of Marylanders support a $15 minimum wage. But there were regional differences there as well. Eighty-one percent of people polled in Montgomery and Prince George’s counties supported the increase, along with 67 percent of people in central Maryland. Outside the urban corridor, Marylanders were nearly evenly split on the issue, with 48 percent supporting the increase and 47 percent opposing.

For some of the bill’s opponents, there’s no doubt the measure will pass this year, but the question instead is whether the impacts of the bill can be mitigated.

“The Cecil County Office of Economic Development anticipates that this $15 minimum wage bill will pass,” the organization’s director, Christopher P. Moyer, wrote earlier this month. “We just ask that the decision not be made in a vacuum and the General Assembly consider the implications to counties that border – and compete with – neighboring states that have much lower minimum wages.”

The office wants to see an amendment that would tie the minimum wage to neighboring states “so that no Maryland county is put at a disadvantage,” Moyer said.

Parrott’s bill doesn’t come up for a hearing until March 5. He hopes there will still be a path forward for more localized rates at that time. “Hopefully they see that there are options, and they put the brakes and actually think about these bills before they vote them out,” Parrott said. “I’m hoping that there is a pause.”

The increase from the current minimum wage would equate to about $10,000 a year for full-time minimum-wage workers.

California, Massachusetts, New Jersey, New York, and the District of Columbia have passed laws to phase in a $15 minimum wage rate. Some states, such as California, New York, Ohio, and Nevada, have different minimum wage rates based on factors like company size, location, and health benefits offered.

House Economic Matters Chairman Dereck E. Davis (D-Prince George’s) said the Fight for 15 bill will come up for a vote in his committee on Monday.

There will almost certainly be some amendments, he said, but he’s not sure what will be debated or adopted.

When it comes to the idea of a regional minimum wage, Davis said he can’t speak to the will of the committee, but he doesn’t personally support it.

“I think that would probably cause more confusion than it helps,” he said.

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Skeptics of $15 Minimum Wage Push Regional Carve-Out