Cumberland Times-News

March 4, 2013

Local chamber opposes minimum wage increase

Also objects to Md. sick leave bill

MATTHEW BIENIEK
Cumberland Times-News

— CUMBERLAND — An effort to raise Maryland’s minimum wage and a separate bill to require employers to offer paid sick leave to employees are under consideration by the General Assembly in Annapolis and the Allegany County Chamber of Commerce has taken a stand against both.

House Bill 1204 and a companion Senate bill would increase the state minimum wage to $8.25 or up to the federal minimum wage if it is higher.

The proposed law would also require employers to pay tipped employees, like waiters and waitresses, 70 percent of the minimum wage.

The current federal minimum wage is $7.25. Eventually, the bill would raise the state minimum wage to $10 an hour.

Both bills remain in committee.

“Maryland workers are in desperate need of a raise,” said Sen. Robert J. Garagiola, the Senate sponsor of the legislation. “Our people are working harder but aren’t earning more, and it’s time to give a much needed boost to our economy. Raising the minimum wage would not only put more money in the pockets of these workers but also increase business activity in our state.”

Experts at the Employment Policies Institute disagree.

“An EPI analysis based on a study from economists at Trinity University and Miami University estimates that over 7,200 jobs were lost for Maryland teens between 2005 and 2011 due to federal minimum wage increases during that time period. The unemployment rate for young adults in Maryland is currently 21.8 percent; in the Baltimore metro area, it’s 26 percent,” a press release from the organization said.

“Dramatically raising the cost to hire and train entry-level employees will reduce job opportunities in Maryland — it’s simple economics,” said Michael Saltsman. “Maryland’s entry-level job seekers need more opportunities, not the empty promises of policies like minimum wage hikes.”

The Allegany chamber sent a letter to legislators opposing the bill on Feb. 21. The chamber recognized that the intent of the bill was positive, but warned of the unintended consequences of the legislation.

“A minimum wage increase would drive up employer cost ... which would ultimately be passed on to consumers,” the letter said. The chamber also said the cost increases could lead employers to downsize their work forces.

Proponents, though, cite a study by The Economic Policy Institute, which estimates an increase in the minimum wage could raise pay for more than 536,000 Marylanders, while injecting approximately $392 million into Maryland’s economy and creating an estimated 3,400 jobs.

House Bill 735 and a companion Senate bill would require private employers to provide paid sick leave.

A fiscal and policy note prepared by the Department of Legislative Services provided some information on the bill’s possible impact.

“According to the Institute for Women’s Policy Research, 709,400 private-sector workers do not have earned sick days in Maryland. The institute estimates it will cost Maryland employers $192 million to provide new earned sick days for employees. ... To the extent that mandatory sick and safe leave increases the cost to an employer of hiring an employee, employers may experience increased costs.   

“However, some costs might be saved through paid sick leave,” according to the fiscal and policy note.

“Businesses may benefit by experiencing reduced turn-over, increased productivity and reduced spread of illnesses,” the fiscal and policy note said.

The chamber also opposed the paid sick leave bill.

“As drafted, the bill does not contain certain exemptions for small businesses that will be ... affected by this legislation,” said a letter from chamber leaders to state legislators.

The bill “will further drive businesses away from the state of Maryland,” the chamber’s letter, signed by E. William DuVall, the chamber’s legislative committee chair, and Stu Czapski, the chamber’s executive director, read.

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