Business Group Knocks Accelerated Minimum Wage Proposal, While Dems Urge Continued Unemployment Benefits

A Maryland business group panned a proposal to accelerate the state’s increase to a $15 minimum wage on Thursday, while Democrats in Annapolis continued to decry Republican Gov. Lawrence J. Hogan Jr.’s action to end extended unemployment benefits in early July.

Mike O’Halloran, the head of NFIB-Maryland, which represents small businesses in Maryland, said the minimum wage proposal — to speed up the state’s transition to a $15 minimum by 2 1/2 years — would add “insult to injury for small business owners trying to recover and keep Marylanders employed.”

House Economic Matters Chairman Dereck E. Davis (D-Prince George’s) told Maryland Matters on Wednesday that he would pursue the change in the minimum wage law after Hogan’s decision to end expanded federal unemployment benefits early.

“I don’t think we need to take away the benefits. I think we need to increase the wages,” Davis said. “It’s simple economics.”

Under his proposal, employers with 15 or more workers would be required to pay at least $15/hour effective on July 1, 2022, instead of January 1, 2025.

Employers with fewer than 15 employees would have to boost pay starting on July 1, 2023, instead of January 1, 2026.

“Less than a year ago, leaders in Annapolis told small businesses the greatest economic crisis in generations was no cause to delay the scheduled increase to Maryland’s minimum wage. Now they want to speed up the cost of doing business in our state,” O’Halloran said in a statement. “Labor costs are the single, biggest line item for small business owners, who are the first to suffer when policy makers make hurried decisions like this. Speeding up the phase-in is not a job creator. It will not save jobs. It will not keep people employed. It will cost workers money in the long run.”

On Thursday, some lawmakers continued to urge Hogan to reconsider his decision.

“We realize that you strongly believe that discontinuing these benefits will encourage Marylanders to return to work, strengthening the state’s economy,” the six members of the Baltimore City Senate Delegation wrote to the governor. “However, that belief is strongly misguided.”

Marylanders have used their unemployment benefits to spend money at small businesses, and the state’s focus should be creating a plan that would allow people to return to their workplaces safely, the lawmakers wrote.

In D.C., Democrats on the Congressional Joint Economic Committee released damage estimates for the early cancellation of federal unemployment programs at the state level.

According to the committee, ending the $300 supplemental unemployment benefit five weeks early will mean $544 million less payments to unemployed Marylanders, and could result in an $877 million knock to the state economy.

The committee’s estimate assumes that $1 in unemployment benefits generates $1.61 in local spending. The estimates do not include the impact of the early cancellation of long-term unemployment payments and benefits for workers who previously didn’t qualify, including gig workers and the self-employed.

On Friday, Comptroller Peter V.R. Franchot, a Democratic candidate for governor, plans to speak at a rally hosted by UNITE HERE Local 7, urging Hogan to restore the expanded payment programs.

Jon Baron, another Democratic candidate for governor, proposed a “Back to Work Bonus,” which would give unemployed Marylanders who find work a portion of the remaining pandemic unemployment assistance for which they would have been eligible for.

“Slashing benefits is not the answer,” Baron said in a statement. “Now is the time for big, bold ideas and Back to Work Bonuses will cut unemployment and help working families get back on their feet.”

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