Increase the Minimum Wage in Maryland and the US

Increase the Minimum Wage in Maryland and the US

By: Mike O’Loughlin, Ph.D.

Professor, Salisbury University

“Wealth concentration returning to levels last seen during the Roaring Twenties,” reads a recent headline wherein new data indicates that “the 400 richest Americans now own more than the bottom 150 million.” (1)

 The repercussions of this inequality are many and legislative solutions at both the federal and state level are called for if we are to curb this trend that undermines our democracy.    

In this context, we should encourage the passage of Senate Bill 280 and House Bill 166, both of which would set the state of Maryland on the course of requiring a minimum wage of fifteen dollars an hour by the year 2023.  

In this context, we should encourage the passage of Senate Bill 280 and House Bill 166, both of which would set the state of Maryland on the course of requiring a minimum wage of fifteen dollars an hour by the year 2023.  

While Maryland’s present $10.10 per hour minimum wage is superior to the federal level of $7.25, it remains woefully inadequate.  A full time worker at this rate earns approximately $21,008 per year. (2)  This income sets a three person household below the federal poverty threshold of $21,330 according to the Department of Health and Human Services “Federal Poverty Guidelines” which sets the standard for the forty-eight contiguous states. (3)

 Although a uniform federal upgrade remains necessary, Maryland can help lead the way towards establishing a more just and sustainable minimum wage for all of its citizens.  

 Left to its own dynamic, capitalism generates a whole class of low wage jobs, creating poverty wage jobs where a forty hour work week still brings home a poverty level income.  

 A minimum wage law addresses this social injustice by creating a wage and income floor below which no citizen should have to work.  Just as no one has the right to hold slaves as workers, no employer should have the right to employ workers at subsistence level wages.  Just as the Emancipation Proclamation of 1863 was a major step forward for the abolition of slave labor, the Fair Labor Standards Act of 1938 was a major step away from “wage slave” labor.  In addition to establishing a forty hour work week and an eight hour day, this law established the principle of a minimum wage whose intention was to stop exploitative labor conditions.

An adjusted wage could also help address the problem of aggregate demand in the economy.  Higher paid wage workers spend higher percentages of their income in the market place and will spark higher production, higher employment and higher tax revenue to fund important government services.

 Additionally, a higher minimum wage would help curb the trend towards ever greater income and wealth inequality which has returned our society to the robber baron era of the early 20th century.  If past is prologue, increases in the minimum wage tend to push up wages and incomes of other working class and middle class workers, who will be able to demand and obtain higher incomes and take home in the aggregate a greater share of national income.

 Governor Hogan is reluctant to get behind such legislation because he believes that these higher wages would place an undue burden on small businesses who tend to depend disproportionately on minimum wage workers.  With higher wages required, fewer workers may be hired or the business’s solvency may be threatened.

However, it is unjust to burden workers with the burdens of business in the making of profits.  Remedies for keeping small businesses alive need to be found elsewhere than on the backs of working class Maryland citizens.

Moreover, the legislation phases in the increase to $15 and thus allows businesses to adapt gradually over time which should enable them to make the necessary adjustments to their business plans to accommodate decent wages.

The bills in question also index the new wage to the rate of inflation which is a vital improvement on the present legislative mechanism presently necessary to keep the wage at the “living wage” level.  This dimension would match the present day status of Social Security which is also pegged to an inflation index and consequently keeps current the buying power of Social Security recipients. Minimum wage workers deserve no less.

In short, social justice and reasoned economics go hand in hand with an increase in the minimum wage.  We will be a better democracy for it.

The views expressed here are the author’s and do not necessarily represent the views of Our Maryland or Our Maryland Education Fund

[1] https://www.washingtonpost.com/us-policy/2019/02/08/wealth-concentration-returning-levels-last-seen-during-roaring-twenties-according-new-research/?utm_term=.1f558d9abc07

[2]https://www.minimum-wage.org/maryland.

[3]  New figures just published February 1, 2019.  See Department of Health and Human Services at https://aspe.hhs.gov/poverty-guidelines

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