Living wage for Maryland families

Working families in Maryland and across the nation earned a great victory this year in Annapolis when the state House and Senate passed this country's first statewide living wage law. However, Governor Ehrlich has blindly vowed to kill the bill, wrongly labeling it anti-business and claiming it will be destructive to the state's economy. He must not veto this important bill.

The concept of a living wage is not new. In 1933, President Roosevelt said "No business that depends for existence on paying less than living wages has any right to continue in this country." In fact, living wage bills already apply to county contractors in Montgomery and Prince George's Counties, Baltimore City and at least 75 other municipalities nationwide.

The problem that the living wage bill will solve is glaring and egregious. Maryland contracts companies to hire and manage workers for the state, such as groundskeepers and janitors in state-owned buildings. Unfortunately, these businesses use the money they get from the state to pay their workers only minimum wage, $5.15 an hour, allowing the companies to make a huge profit while their workers remain well below the poverty line. The living wage law will guarantee that workers paid by state contracts receive a high enough salary to live above the poverty line.

"The principle behind [this law] is very simple – you shouldn't use tax dollars to create poverty-level jobs," says Sean Dobson, Director of Community Affairs for Progressive Maryland, the lobbying coalition whose efforts got the bill passed this year. "It's about rewarding work and making the American dream possible for tens of thousands of our neighbors here in Maryland." According to Progressive Maryland, more than 500,000 of the state's citizens live in poverty. Many of the adults in poverty work full time, and 167,000 of them are children.

Thousands of families, disproportionately black and Latino, rely on state-funded, minimum-wage service jobs as their main source of income. Unfortunately, no matter how hard and honestly they work, these people will be lucky to ever get off the welfare rolls and become self-sufficient. According to Progressive Maryland, workers in these dead-end jobs, paid for by state tax dollars, would have to work at least 115 hours a week to live above the poverty line and afford a two-bedroom apartment.

This bill is clearly necessary for Maryland's working poor families. Ehrlich, however, has stated that he believes that the living wage bill is dangerous because it will drive businesses out of Maryland and hurt the state's economy. But behind the rhetoric, the truth is that this law will not hurt Maryland's businesses but could, in fact, help them.

First, the living wage law that passed is not far-reaching. "It only affects less than one percent of businesses in Maryland," says Dobson. The bill only mandates that large companies with major state contracts pay the higher wage. These companies certainly have the money to make sure that their employees can put food on the table without working three jobs.

Many studies have shown that living wage laws can be beneficial to businesses. The Economic Policy Institute, an independent economic think-tank, has done extensive studies on the Baltimore living wage law, and its conclusions completely refute Ehrlich's argument. Baltimore was found to have no job loss after the law went into effect, and contract costs rose less than inflation. Also, nearly all businesses affected reported that lower employee turnover, training costs and increased worker efficiency due to the higher wage balanced out any increased expenses.

Furthermore, the argument that state contractors will flee to Delaware to avoid paying higher wages is ridiculous once one takes a moment to actually consider it. "They [businesses] would be pretty foolish to leave, because then they wouldn't get the state contracts," Dobson says. "The threat to leave lacks all credibility."

Living wage laws are good for workers and good for business. If Ehrlich follows through on his multiple promises to veto the bill, he will be hurting Maryland's thousands of hard-working men and women paid with our state tax dollars, people who are trying to work their way into the middle class. If he cares about his constituents more than he cares about the well-funded business lobbyists' demands, he will reconsider his misguided opposition to this bill.