Cumberland Times-News

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September 14, 2013

Officials weigh in on minimum wage debate

Republicans think move bad for business; Democrat disagrees

CUMBERLAND — A proposal to increase the minimum wage continues to be unpopular among area leaders, with one exception. Three more local leaders have weighed in on the issue recently, including U.S. Rep. John Delaney, D-Md., who favors a minimum wage increase.

“In reflecting upon the fact that an individual could work full time and still live in poverty, this issue is of singular importance to me. Maryland can do better and I will work with all parties to shine a spotlight on this topic,” Delaney said in a recent news release.

Delaney said raising the minimum wage to about $10.10 per hour by 2016 could be good for business.

“Raising the minimum wage is one of the most direct ways we can help working families in Maryland. Coming from the private sector, I also firmly believe that if implemented the right way, raising the minimum wage is fundamentally good for businesses in Maryland,” Delaney said.

His view clashes with that of Ray Givens, a Republican candidate for the District 1-C delegate seat in the Maryland General Assembly for the 2014 primary.

“If minimum wages are raised under present conditions; wage payers will cut their staff, which no one benefits from. Someone loses a job. The business either cuts its production, or more than likely puts more of a workload on the remaining staff. Either way the worker loses,” Givens said.

Givens said people need to consider the purposes of the minimum wage.

 “A minimum wage is a starting point for someone just entering the work force. It's a beginner’s salary for inexperienced and unskilled labor. These types of jobs, with that salary range, is not meant to sustain a family. They are meant to sustain, or support, one person entering the labor market. These usually are not jobs that people on the most part make a career of. These are as they seem reasonable to be, entry level positions at entry level pay,” Givens said.

 People can move up in their careers in the natural course of things, Givens said.

“The minimum salary now is $7.25 per hour. As an employee progresses with their knowledge, skill, and work ethic, it's only reasonable that their wage should also increase either on that job, or another. With the three levels of advantage just mentioned, workers usually move on to better jobs with better wages. That type of progress usually continues until a desired career is obtained that one is able to sustain a chosen lifestyle,” Givens said. Raising the minimum wage too high will shrink profits and make small businesses look elsewhere, out of state, to do business, Givens said.

While Givens does not favor an increase he is concerned about the disparity in pay between executives and workers.

“On the other hand; how reasonable is it that a corporation pays minimum, or low wages to its workers while presidents, CEOs and other executive officers leave after just a couple of years with parachute severance packages and benefits. This is a whole other story, but one that we need to remember during this discussion,” Givens said.

 A proposal that would raise the minimum wage to $12.50 per hour by Delegate Keith E. Haynes of Baltimore will likely be prefiled before the 2014 General Assembly session, Haynes said.

Similar proposals have met legislative dead-ends in the past few years.

Last year, House Bill 1204 and a companion Senate bill would have increased the state minimum wage to $8.25 or up to the federal minimum wage if it is higher. The bills did not make it to the governor’s desk.

Delegate Wendell Beitzel also opposes the idea of increasing the minimum wage.

“I do not support raising the minimum wage to $10 per hour or more. The business people that I speak to here in Garrett County, particularly tourism-related businesses, believe this would create a real economic hardship for their customers and employees. There is no question that businesses will need to raise prices or lay off or hire fewer employees,” Beitzel said.

His own experiences as a business owner tell him an increase would be a bad idea.

“As a former owner of a resort hotel and restaurant at Deep Creek Lake, I fully understand the stress that is placed on businesses and price of services and goods when wages are raised artificially by government regulation and not left to free-market influences. The main benefactor of this large increase in the minimum wage is the government. When wages are raised on the lowest rung of the ladder, it is necessary to raise everyone’s level of wages above. The result is that employees move into higher tax brackets, so the government gets more income taxes,” Beitzel said.

Forced wage increases also cause prices to rise to cover the increase in employee costs, resulting in inflation, which takes more of the workers’ money to live, but the government gets more sales taxes. “So who wins?” Beitzel asked.

 Allegany County Commissioner Michael McKay, also a candidate for the District 1-C delegate seat, Sen. George Edwards and Delegate Kevin Kelly all have said they would oppose a minimum wage increase.

McKay, Kelly and Edwards made their comments in a Times-News story Sept. 5. The Allegany County Chamber of Commerce is also on record as opposing increase in the minimum wage.

Contact Matthew Bieniek at mbieniek@times-news.com.

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