Questions and Answers about… Raising the Minimum Wage in Maryland

Questions and Answers about… Raising the Minimum Wage in Maryland 

Q: What is the minimum wage?

A: The current minimum wage in Maryland equals the federal minimum wage of $7.25 an hour – about $15,000 a year. Tipped workers in Maryland can be paid only half that amount (just $3.63 an hour) and have to make the rest up with tips.  The minimum wage is the only policy that sets a floor on wages in the United States and has a significant impact on the pay scales of low-wage workers. The minimum wage reached its peak purchasing power in 1968. Inadequate federal and state action has caused it to erode in value over time as the cost of living rises. Had it kept pace with inflation since the late 1960s, the federal minimum wage would be almost $10.60 today.

Q: How many workers in Maryland will benefit from a minimum wage increase?

A: According to the nonpartisan Economic Policy Institute (EPI), over 530,000 Maryland workers – more than one out of every five workers in the state – will benefit from raising the minimum wage to $10 per hour. With low-wage occupations making up a majority of all job growth in the post-recession recovery, a growing number of workers in Maryland are depending on minimum wage jobs to make ends meet. The influence of the minimum wage in setting pay levels for America’s workers will only grow in the years ahead: the Bureau of Labor Statistics estimates that 6 of the 10 occupations with the fastest-projected growth over the next decade will be low-wage occupations.

Q: Who are the workers who will benefit? 

Raising Maryland’s minimum wage will provide much-needed assistance to the growing number of adult workers who have been forced into low-wage jobs as cashiers, fast food workers, or administrative assistants due to the weak economic recovery. Boosting the minimum wage for tipped workers will also increase the earnings of restaurant servers, nail salon attendants, car wash workers and others whose pay depends on inconsistent and unpredictable tipping practices.

EPI estimates that over 86% of the workers benefiting from raising Maryland’s minimum wage are adults age 20 or older. 77% of these workers work more than 20 hours per week, and over 46% have at least some college education. 350,000 children across the state have at least one parent who would benefit from raising Maryland’s minimum wage.

Q: Should we raise the minimum wage in a struggling economy?

A: Minimum wage increases stimulate the economy through increased consumer spending. EPI estimates that raising Maryland’s minimum wage to $10 per hour will generate over $490 million in new consumer spending- helping create a more fair and sustainable  economic recovery without increasing costs to taxpayers. Despite opponents’ claims, extensive research on state minimum wage increases makes clear that such increases do not result in slower job growth, even in times of economic recession. In fact, the boost in consumer spending from raising Maryland’s minimum wage will support the creation of 4,280 new full-time jobs as businesses expand to meet increased consumer demand.

Q: How does Maryland compare to other states?

A: Currently 19 states plus the District of Columbia have higher minimum wages than Maryland’s $7.25 minimum wage – including states like Arizona and Montana that have much lower cost of living than MD.  Ten states also “index” their minimum wage so it is adjusted annually to protect workers from losing buying power as prices go up. 

Q: What if we don’t raise the minimum wage and index it to inflation?

A: The minimum wage – already badly eroded - will continue to lose value, dragging down pay for workers in the growing low wage industries that increasingly characterize our economy. Wage inequality – driven in part by the declining value of the minimum wage compared to other workers’ wages – will worsen.  In addition, businesses that pay a living wage will face unfair competition from minimum wage employers taking advantage of the artificially low wage rate. 

Q: Who supports raising the minimum wage in Maryland? 

A: A 2010 poll of likely Maryland voters found an overwhelming 79% support for raising the minimum wage to $10 an hour and tying it to cost of living.  This support was strong across parties, across demographics and across the state.

The coalition fighting to raise our state’s minimum wage includes concerned individuals, businesses and organizations representing low wage workers, women, immigrants, and the civil rights community. 

 Find out more and join our campaign at www.raisemaryland.org