Delaney’s case for increasing the minimum wage

Editor’s note: This commentary appeared in the December 13 edition of CenterMaryland.org.

By Donald C. Fry

Maryland business leaders should advocate for the adoption of a “measured, prudent, and appropriate” approach for increasing the minimum wage to show leadership on an evolving issue that has the potential to spawn the adoption of “misguided” legislation at state and local levels, Congressman John Delaney told a group of CEOs and senior business executives from the Greater Baltimore Committee on December 12.

Delaney (D-Md. 6th) urged business leaders to advocate for increasing Maryland’s $7.25 per hour minimum wage – the federally-mandated minimum – by “about a dollar,” which would bring pay for Maryland’s lowest-earning workers to at least the poverty level.

His remarks came during a roundtable discussion with GBC chairman Brian Rogers and nine leading members of the GBC on the minimum wage and other topics relating to Maryland’s business climate.

While it might not seem unusual for a Democratic congressman to support increasing the minimum wage, Delaney, the only member of Congress who has been the CEO of a publicly-traded company, articulates a thoughtful perspective on the minimum-wage issue.

Here’s his reasoning.

Most states with high costs of living except Maryland have increased their minimum wages above the federal minimum. Maryland is one of the few high-cost states with a minimum wage that is less than the poverty level.

“We’re one of the most expensive states in the country, as everyone knows,” Delaney said. But Maryland is a state where the minimum wage for a 40-hour week is below that poverty line, he noted. “That struck me as a problem that, unless it got solved, might result in minimum-wage policy that was not as well conceived as it could be.”

“There is a lot of momentum for the minimum wage and there is potential that it be done in the wrong way,” said Delaney. “So I think it has to be done in the right way.”

The wrong way, he said, would be the passage of a reactionary policy for a politically-driven, dramatically large increase. “You can see this being used as a weapon by people who are inherently distrustful of business. And that’s a bad outcome,” said Delaney.

“If the business community fights this, we’ll more likely get misguided minimum-wage policy,” he said. “If the business community is highly participant in this discussion, I think you’re more likely to get measured, prudent, appropriate minimum-wage policy.”

Delaney noted that research is equally divided on the issue of whether increasing the minimum wage damages the economy or stimulates it.

“What that tells me is you’ve got to do this carefully. But if you do it carefully, it should not have a negative impact on the economy and you’ll actually help a bunch of people. That’s why I became supportive of this,” he said.

Delaney is among 152 co-sponsors, along with five other Democrat House members from Maryland, of HR 1010 in the House of Representatives that would increase the federal minimum wage to $8.25 per hour.

The country would be “much better off,” from the standpoint of regional competitiveness, if minimum wage policy was set at the federal level, said Dulaney, but he termed such an outcome “highly unlikely.”

Meanwhile, proposals to increasing Maryland’s minimum wage have been percolating in Annapolis, two Maryland counties in the Washington, D.C. suburbs, and in the District as well.

In the 2013 session of the Maryland General Assembly, legislation was proposed in both houses to raise Maryland’s minimum wage to $8.25 this year and ultimately to $10 per hour in 2015. Both bills died in committee. Nevertheless, minimum-wage legislation is anticipated in the 2014 session that begins on January 8 and could very well be one of the top issues debated in Annapolis this year.

Montgomery and Prince George’s counties last month approved raising their minimum wages to $11.50 per hour. Legislation to increase the minimum wage in Washington, D.C. from its current $8.25 per hour to $11.50 per hour is pending before the D.C. District Council, where members are reportedly negotiating with the D.C. mayor, who favors raising the minimum wage to $10 per hour. The council had preliminarily approved the $11.50 per hour wage at its December 4 meeting.

These developments appear to offer yet another reason for the business community to be proactive rather than reactive when it comes to state and local minimum-wage policies.

“If you look at the facts, there’s a very high probability that something’s going to happen,” Delaney said, contending that business would be better off being part of the discussion than not.

Among other things, it would also serve to “create a space” for other long-term business issues relating to competitiveness to be talked about, he noted.

At the GBC, which is the leading proponent of creating a more competitive business environment, this gives us food for thought.

Donald C. Fry is president and CEO of the Greater Baltimore Committee. He is a regular contributor to Center Maryland.

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