Mary Pat & District 14 IN THE NEWS


City Councilwoman Mary Pat Clarke proposes $15 minimum wage in Baltimore

Lorraine Mirabella and Natalie Sherman | April 18, 2016, 8:05PM
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Baltimore would become the latest jurisdiction to require businesses to pay workers at least $15 an hour under controversial legislation City Councilwoman Mary Pat Clarke plans to introduce Monday.

The minimum wage in Baltimore would increase incrementally until it reaches the full amount by 2020, affecting up to 80,000 low-wage workers — about a quarter of the city's workforce. Amid a nationwide push for higher wages, other cities and states already have passed similar increases.

The proposal is being made one day before the one-year anniversary of the death of Freddie Gray from injuries suffered in police custody and the unrest that followed.

"That led us as a city to be concerned about a lot of the issues that underlie such unrest," Clarke said, "and one of them is certainly economic equity and the divide between people who are working sometimes three jobs and still are going to the church pantry at the end of the month to feed their families."

"We're in line with what's happening and what has to happen" to help people become self-sufficient, she said. "Subsidies are not what working people want."

But critics said raising wages higher than elsewhere in the state would put the city and its businesses at a disadvantage and lead to job losses and higher prices.

"Businesses can easily choose where to locate in one jurisdiction or another based on what their local laws are," said Donald C. Fry, president of the Greater Baltimore Committee. "It's certainly going to increase the cost of doing business for companies considering Baltimore as a location or looking to expand."

Eight of 15 members of the City Council are co-sponsors of the legislation, including Council President Bernard C. "Jack" Young.

Baltimore Mayor Stephanie Rawlings Blake said through a spokesman that she supports the concept of raising the minimum wage, but recognized "the issue of competitiveness."

"She believes the minimum wage is something that should be raised at the regional or state level, not by individual jurisdictions," said spokesman Howard Libit.

Maryland's minimum wage is $8.25, a dollar higher than the federal rate. The General Assembly passed a bill during its 2014 session that will increase the state's base wage to $10.10 by 2018. The Montgomery and Prince George's county councils passed bills raising wages in those jurisdictions to $11.50 by 2017.

In March, private sector employees in Maryland earned an average of $27.18 an hour, down about 2 percent from the previous year, according to estimates the U.S. Department of Labor released Friday.

"Our members are still trying to see how they're going to be able to react to the state's recent minimum wage increase," said Mike O'Halloran, Maryland state director for the National Federation of Independent Business. "Now, what Baltimore city is trying to do is move the goal post on us." 

State minimum wages have been increasing as unions and other groups protest worker wages at fast-food restaurants and national chains such as Walmart. This month, California and New York took steps to gradually boost their statewide minimum wages to $15 an hour — the highest in the nation.

Clarke's proposal also would end tipping for servers and other workers in restaurants, who are paid $3.63 an hour in Maryland, increasing their base wage to $15 an hour too.

That's similar to a ballot initiative in Washington, D.C., that gradually would increase the "sub-minimum" wage and eliminates it altogether by 2024. Employers now are required to make up the difference if tips do not reach minimum wage.

David Stahl, the owner of Pete's Grille on Greenmount Avenue, said the legislation would be devastating to his business and others like it. The restaurant has eight employees, including four waitresses, all of whom likely would earn more in hourly wages if the bill passed.

But Stahl said he would have to raise prices and eliminate staff to cover the cost — and even that might not be enough to keep the business open. 

"We don't know that we can raise prices enough to cover that without driving away our customers," he said. 

Widespread price hikes would make the wage increase less meaningful, he said. 

"To the person that might be earning $8 or $9 an hour, how have we helped them if we give them a wage increase but set off a price increase trend?" he said. "From the bottom of my heart I believe this hurts the people they're trying to help."

Some restaurateurs said replacing tips with a $15 minimum could cut some servers' pay.

The key to any increase is to apply it evenly, said John Shields, the chef and owner of Gertrude's, who said he supports higher wages and has long paid workers more than the minimum. But raising the minimum wage would have ripple effects, especially for how higher-end restaurants like his compensate servers.

"Are they going to be happy the people at McDonald's are making $15 and they feel they have so much more experience?" he asked. "You can't keep them at $14, so it's not simple. All salaries will have to be adjusted up.

"There's got to be a price increase, and if that's what it takes for everyone to have a good living wage, I'm all for it."

Studies disagree about whether a minimum wage hike affects employment, though traditionally economists have argued that it would reduce hiring, said Richard Clinch, director of the Jacob France Institute at the University of Baltimore.

But Baltimore has a less robust labor market than most of the cities that have approved minimum wage increases recently, he said.

"Typically areas that have been successful with raising the minimum wage are cities where you don't have quite as big a problem with a disadvantaged working group that lacks the many requisite skills that are demanded by the labor market," Clinch said. "My initial response would be it's again, a very laudable goal, but may have the unintended consequence of diminishing hiring of the very groups she's trying to help."

Penny Troutner, owner of Light Street Cycles in Federal Hill, said she would welcome a wage boost, but would like to see large corporations required to hit the target first.

"As people are paid well, they will have more expendable income," Troutner said. "That's what's going to help small businesses."

In her 25 years in business, she's watched housing and other living expenses increase for the city residents she relies on for business.

"Everything's been going up except minimum wage," she said.

Clarke called her proposal "a big step."

"I'm not minimizing it," she said, "and it's going to require a lot of people cooperating and agreeing that this is important enough to do."

 

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