Living Wages in Maryland: Is the Sky Falling?

The state of Maryland has eacted living wage legislation in an effort to address the nation's growing economic divide.

Gov. Martin O’Malley of Maryland signed the nation’s first statewide living wage bill on WEdsnesday, giving new momentum to the movement to raise wages through legislation and putting Maryland in the forefront of a national debate over government's role in fighting poverty and ineqiality.

"What this bill simply says is, 'If you're working on a contract funded by the people of Maryland, we are going to treat you in a fair and just way so you can put food on the table for your family after a day's work,'" O'Malley said.

Under the law, employers with state contracts will generally have to pay workers a minimum amount — $11.30 an hour in the Baltimore-Washington corridor and $8.50 an hour in the rural counties, where wages and prices are usually lower.

The Maryland state minimum wage is $6.15 an hour, one dollar above the federal minimum.
“This law lifts tens of thousands of families out of poverty and into the middle class,” said Tom Hucker, a first-term Democratic delegate to the Maryland House and before that the executive director of Progressive Maryland, the main group backing the bill. “Today Maryland shows the rest of the country a good way to honor work and fight poverty.”

Nationwide, 145 cities and counties have enacted living-wage bills, which generally require businesses that receive government contracts — and sometimes those that receive subsidies — to pay an amount above the federal or state minimum wage. The highest living wage in the nation is $14.75 an hour in Fairfax, Calif.

Republican bitterly opposed the bill just as they have opposed any legislation (minimum wage increases, social security legislation, affirmative action, business taxes, mandating seat belts and clean air regs. to name just a few) that increase their costs.

Ellen Valentino, the state director of the National Federation of Independent Business (NFIB) in Maryland, said her group strongly opposed the both minimum wage increases and living wage legislation: “We think wage decisions are best left to business owners."

Republican officials and business organization representatives wined that living wage legislation would undermine business growth, cause small firms to go under and increase the state’s deficit. Marc Donohue, a spokesman for the NFIB argued:"There is a downside to mandated wage levels. If you do it to an extreme, you're going to damage your business climate, you're going to damage your small employers and you're going to hurt many of the people you're trying to help.

Living wage critics ignore the reality that when workers are paid more, demand increases stimulating economic growth and profits, government revenues increase as higher wages generate increased income, business and sales taxes and state expenditures on transfer payments to the poor decrease.

Gloom and doom predictions might be politically effective. But they rarely materialize.

The historic pattern is that Republicans and business representatives vigorously oppose proposed legislation. They claim, like chicken little, that if it passes, the sky will fall. Then, once the legislation is enacted, they adapt to the new environment, the rules of the marketplace, and go about their business.

Living wage legislation recognizes that this nation's growing inequality is not simply the result of market forces and globalization. Over the last 30 odd years, a series of political decisions — on taxes, trade, labor rights, monetary policy and regulations — have tilted income and wealth to the top. Living wage laws are an attempt to level the playing field and address the nation’s growing inequality.