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COVID-19 in Maryland Working & the Economy

Business Groups Seek Minimum Wage Freeze

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Advocates for workers realized a long-held goal in 2019 when the General Assembly approved a multi-year increase in Maryland’s minimum wage to $15 an hour.

Now, two influential business groups are urging Gov. Lawrence J. Hogan Jr. (R) to freeze the minimum wage where it is, at $11 per hour, for at least two years.

The Maryland Chamber of Commerce and the National Federation of Independent Business-Maryland cite the downturn in the economy triggered by the COVID-19 pandemic, which has forced many businesses to close and decimated profits for others.

Labor organizers and advocates involved in the “Fight for Fifteen” call the proposal “a slap in the face.” And a powerful committee chairman called the request premature.

“These are the very folks who are making sure that we have food to eat… who are taking care of our folks in nursing homes, who are picking up our trash,” said Ricarra Jones, political director with SEIU Local 1199, a union that represents health care workers.

“These are the very people that we depend on… to be able to continue our everyday lives during this pandemic.”

Under the legislation approved last year, the minimum wage in Maryland is set to increase 75 cents a year until it reaches $15 per hour in 2025. (For companies with 14 or fewer workers, the phase-in peaks in 2026.)

The freeze in the minimum wage is one of dozens of recommendations that the Maryland Chamber and NFIB-Maryland urged Hogan to pursue this week as he eyes a reopening of the state economy.

Among requests made by one or both organizations:

  • additional funding for various aid programs
  • allow companies to delay or defer sales tax payments and licensing fees
  • liability protection related to exposure to the coronavirus through activities or products
  • reductions in state sales tax and/or sales tax holidays
  • a reduction in the corporate income tax rate
  • allow businesses to withhold paid sick leave for reasons unrelated to COVID-19 outbreak for the remainder of the year
  • suspend prevailing wage requirements on all construction through 2021

In a news release this week, the Chamber said its proposals “will assist Maryland in overcoming the economic impact of COVID-19 and rebuilding the strength of its economy.”

“The economic impact of COVID-19 is unprecedented,” the group added. “All indicators point to a recession, if not a full-blown depression. Overcoming the economic implications of COVID-19 will require an extraordinary response.”

Del. Dereck E. Davis (D-Prince George’s), the chairman of the House Economic Matters Committee, said he is opposed to a two-year freeze in the minimum wage — at least for now.

“We don’t know, in these uncertain times, what things are going to be like from one day to the next, let alone one year to the next,” he said.

“That being said, I am sympathetic to the situation that they’re in. We’re all going to have to make some sacrifices — not just the business community,” he added. “Our workers, our citizens, government, they’re going to tighten our belts and make some tough decisions as well.”

Sen. Cory V. McCray (D-Baltimore City), a prime sponsor of the bill, said “an enormous amount of work” went into the Fight for $15.

“Look at our hotel workers. Look at the folks that are working at restaurants,” he said. “These are a lot of low-wage workers that are currently unemployed. When they come back they’re going to have to work twice as hard to pay their rent, food, basic necessities. And I think the state should be respectful of that.”

The bill that lawmakers approved last year gives the Maryland Board of Public Works a one-time opportunity to defer one year’s increase.

“We put that language in that bill for this specific reason, and everybody agreed with it,” said Senate Minority Whip Stephen S. Hershey Jr. (R-Upper Shore).

A deferral, he said, “would be a sign to the businesses that the government recognizes what they’ve gone through and is providing some type of relief.”

The bill increasing the minimum wage to $15 per hour was vetoed by Hogan. Lawmakers subsequently overrode his veto.

A spokesman for Hogan had no comment on the issue on Thursday.

Jones, the labor organizer, noted that low-wage workers are the least likely to be able to work from home during the public health crisis.

“They’re risking their lives, day in and day out, to continue to show up to work so that we — the rest of us — are able to make it through this time,” she said.

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Business Groups Seek Minimum Wage Freeze