Those on the other side of the debate, such as some small business owners like the Kangs and legislators like state Senate Minority Leader David Brinkley (R-District 4), contend that increasing the cost of labor will either render businesses insolvent or force them to reduce hiring. Various surveys of economists indicate that many academics take a more nuanced view.
“A novel way to approach this is to acknowledge that it’s actually an entry-level wage,” Brinkley said on Jan. 23 in delivering the GOP response to O’Malley’s State of the State address. “No one can be expected to remain at this entry-level wage for very long; nor should they.
“But if I, as the business owner, only have so much to allocate to payroll and I wish to remain in business, two things are going to happen: Fewer people will be on my payroll, and I will look long and hard at automating what parts of my operation I can, perhaps putting even more less-skilled employees out of work,” continued Brinkley. “Aren’t we seeing that already with self-checkout at grocery stores and retail outlets? Do you remember that we once had full-service gas stations?”
Pointing to Costco, the national price club retailer that privately raised wages and whose Lanham, Md., branch the president visited last week, Abramson argued that a gradual increase in the minimum wage would help companies in the long run. Higher pay would combat turnaround and thus the need to retrain new employees.
“It’s not like there’s a sudden jump to $15 an hour,” he said. “I don’t see $10.10 scaring businesses from Maryland. Not those numbers.”
Jews United for Justice, a Washington, D.C.-based advocacy group, has been involved in the campaign for a higher minimum wage since June.
“For some of the people I work with, it really comes from a religious conviction,” said Katie Ashmore, who has been heading JUFJ’s minimum-wage push. “We’re working to create working conditions that both favor the poor but that also create conditions to honor work.”
Raising the minimum wage, Ashmore said, is in everyone’s best interest. Not only will it help employees making the minimum, but employees making just above the new minimum would likely see increased pay as companies work to maintain their pay structure.
Dan Crawford, who works in media relations at the Economic Policy Institute, an organization that has been a strong supporter of raising the minimum, said this ripple effect is one of the biggest ways a minimum wage hike could benefit the economy in Maryland.
“It’s a win for workers,” said Crawford. “There are other people making $9 an hour, and that’s still not enough.”
Crawford added that although companies will probably have to cut costs in order to pay employees more, those companies have options available to them that don’t always include cutting jobs. For example, he suggested, companies can raise their prices or cut back on costs such as job training.
Lester Miller has been a minority partner at Miller’s Minuteman Press for 13 years. As a business owner, he said, the picture doesn’t look nearly so rosy.
“It’s the businesses’ responsibility to maximize profits of the shareholders,” said Miller. “You will force certain industries and certain people to find other ways of doing business.”
Miller supports the idea of having a minimum wage, but the idea of government telling businesses to pay their employees so much more per hour makes him nervous.
“You can command business to pay, but that doesn’t mean it’s going to work,” he said. “I think the unintended consequences that come with it are the things that will hurt employment.”
At Minuteman, none of the company’s 78 permanent employees are paid the minimum, said Miller. But when stores receive unusually large or specifically detailed orders, they sometimes employ extra help in the form of temporary workers assigned to one job who are usually paid less than the $10.10 threshold. If the wage is increased, Minuteman will have to reassess this system.
“I think the powers that be should rather look at what is holding the economy back rather than just trying to command the economy, because command economies do not work,” he said.
For Del. Ron George (R-District 30), who owns a jewelry business in Severna Park, timing is everything.
“Businesses are being hit extremely hard,” George said, pointing to the recession, the state’s stormwater management fee and the implementation of the federal Affordable Care Act.
“It would be a different question if we were talking about raising it 25 cents or 50 cents,” he said. “You cannot keep shrinking the private sector tax base and increasing the government jobs.”
Raise Maryland, the state’s most vocal lobbying body on behalf of raising the minimum wage, says the issue boils down to people.
“It’s really about increasing the standard of living,” said Mat Hanson, the organization’s campaign manager. “No person who works full time should have to live in poverty.”