(March 1, 2019) Maryland’s “Fight for Fifteen” Minimum Wage Bill generated a full day of testimony from hundreds of voices for and against boosting the state’s bottom pay rate to $15 hourly by 2023 during a Senate Finance Committee hearing last Thursday.
Although the General Assembly failed to pass comparable minimum wage legislation every year since 2016, the push was renewed again this session by Del. Diana Fennell (D-47, Prince George’s) and Sen. Cory McCray (D-45, Baltimore) who are sponsors of cross-filed HB 166 and SB 280, which seek to raise the minimum wage to $11 per hour later this year, and then add $1 each year until reaching $15 in 2023.
McCray, acknowledging more than 200 people were on hand to testify, provided minimal comments during last week’s hearing but highlighted the Finance Committee’s significant sway over passage.
“People will state that this bill is about young people, but I would challenge that position,” he said. “It’s about the people that actually work in hospitals, hotels and manufacturing.”
Baltimore Mayor Catherine Pugh said SB 280 would assist the numerous wage earners across Maryland who have struggled to keep pace with cost of living rate increases.
“It is minimum, we’re not even talking about a living wage, this is minimal living,” she said.
Pugh echoed McCray’s sentiments about the Finance Committee charting the legislation’s direction.
“This is the committee that has the ultimate decision that will allow this bill to move to the floor and to the rest of the body,” she said.
Leo Gertner, attorney with the National Employment Law Project, said across Maryland pay rates under $15 hour have proven insufficient to cover basic living expenses.
“The current $10.10 minimum wage translates to $21,000 a year for a fulltime worker,” he said. Gertner said SB 280 would raise wages for about 22 percent of Maryland’s workforce.
“Over 50 percent of workers who are going to be affected by this are workers of color,” he said.
SB 280 proponent Ricarra Jones, a political organizer with Service Employee Industry Union Local 1199 and chairperson of the “Fight for $15” coalition, was grilled by Sen. Stephen Hershey Jr. (D-36, Kent/Queen Anne’s/Cecil/Caroline) about fiscal support for the ongoing effort to increase minimum wage rates in Maryland and other states.
“The total spend of this national campaign is reaching close to $100 million,” he said. “Do you know who’s funding this?”
While feigning a lack of knowledge about fiscal backing, Jones said the issue had united a multitude of passionate advocates and consistently polled over 70 percent public approval.
Providing opposition testimony was Amy Rohrer, Maryland Hotel & Lodging Association president and CEO, who said the combination of a $15 minimum wage and phasing-out of tip credits, as proposed in SB 280, would result in elimination of services and reduced employment within the hospitality industry.
Exempted under the state’s current minimum wage regulation are: employees earning at least $30 monthly in tips who are paid a $3.63 hourly rate that must combine to equal at least the current $10.10 scale; amusement and recreational businesses employees who are paid the higher sum of either 85 percent of the minimum wage or $7.25; and employees under 20 years of age who must earn at least 85 percent of minimum wage rates during their first six months on the job.
“We want to work with you to increase jobs and opportunities for our 53,0000 employees,” she said.
Revisions incorporated in the newest “Fight for Fifteen,” bill include increasing pay rates for tip earners to the $15 minimum by 2027, equal pay for workers under the age of 20, and removing current exemptions disqualifying rural agricultural workers from earning the state minimum.
Jack Brooks, Chesapeake Bay Seafood Industry Association president, said it would prove detrimental to small family-operated crab processing businesses if current wage exemptions for pickers and packers were eliminated by passage of SB 280.
“The number of crab meat processing companies is down from 54 in 1995 to less than 20 today,” he said.
Brooks estimated the proposed wage increase would add about $3.50 to the cost of processing a single pound of lump meat.
“Anybody that wants a pound of Maryland crab meat is going to have to pick it themselves because we’re not going to be able to produce it,” he said. “We’re looking at this as a job killer and a small business closer.”
Hale Harrison, vice president of operations for Harrison Group Hotels, said a $15 wage rate would create a competitive disadvantage with neighboring resorts, such as Virginia Beach and Myrtle Beach, and would likely curtail the business group’s future development projects involving hotels and restaurants.
“My family has invested $100 million in Maryland and Ocean City since 2001,” he said.
Harrison also noted wide wage disparities exist across Maryland.
“How can anybody say there isn’t a different cost of living on the Eastern Shore than there is in Baltimore, D.C. or Montgomery County?” he asked.
Brice Phillips of Phillips Seafood Restaurants said both the wage increase and tip-credit elimination included in SB 280 would wreak further havoc on his businesses’ already decimated bottom line.
“I’ve closed seven (restaurants) in the last seven years because of increased cost of seafood … and the increased cost of doing business,” he said.
Phillips said to recruit superior staff requires paying above minimum wage and estimated the financial impact from SB 280 on his two remaining food establishments at roughly $10.8 million.
“Would you gamble $10 million on this bill if you had two restaurants, because that’s what you ask me to do if you issue a favorable report,” he said.
Subsequent to the Senate Finance Committee hearing last Thursday, the House Economic Matters Committee, which held a previous hearing for the minimum wage bill in early February, voted 17-7 on Tuesday to approve cross-filed HB 166 with amendments granting the Board of Public Works authority beginning in Oct. 2020 to suspend scheduled minimum wage increases due to declining employment rates or reduced state revenues, as well as altering funding increases for community service providers. The minimum wage legislation has not yet been scheduled for a vote from the full house and senate.