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Md. votes to raise the minimum wage

9 April 2014 By Jonathan Munshaw, Editor-in-Chief No Comments

Maryland became one of the few states in the country to raise the minimum wage to $10.10 this week after it passed through the state legislature.

Gov. Martin O’Malley is expected to sign the bill into law that will bring up the wage floor incrementally, eventually getting it to $10.10 by 2018.

The wage will be edged to $8 an hour on Jan. 1, 2015 then to $8.25 on July 1 of that year. It will go up by 50 cents again in 2016 and 2017, eventually hitting $10.10 on July 1, 2018.

Charles Russo, a professor in the Department of Accounting at the University, said the wage increase is long overdue to account for inflation.

“Let’s say you look at 1978. You adjust that to the end of 2013 with inflation, it equates to $9.88 right now. If you wait four years, and increase the $9.88 for inflation, by 2018, the minimum wage should be $11.12 an hour so they’ll be a dollar behind still, but it’s still a good start,” Russo said.

Maryland was the second state in the last month to match a proposal made by Democrats within Congress to raise the federal minimum wage to $10.10, a move that President Barack Obama has supported.

However, Russo said there will be certain states, such as Texas, that won’t raise their minimum wage until it is federally mandated.
Opponents of the wage increase in Maryland were concerned over the possibility of job loss after the Congressional Budget Office released a study on the possible national increase.

The study had a wide range of outcome, saying that a $10.10 increase could bring results that range from a very slight decrease in employment to a maximum loss of one million jobs, with the average estimate landing at about 500,000 jobs lost if the wage is increased.

“The actual impact on jobs will depend on the impact of the economic multiplier of the increased wages as they are spent in the economy. The majority of increases to low wage workers will be spent rather than saved which stimulates the economy. Since this is unlikely to pass the U.S. Congress, some states are adjusting the minimum wage themselves including Maryland. Maryland job losses should be minimal because the increase in the minimum wage is phased in over four years to only $10.10 in 2018,” Russo said.

Nancy Hafford, the executive director of the Towson Chamber of Commerce, said that she could not give the local business’s take on the wage increase, because there has not been any sort of survery or poll.

“Some of our members support the increase, and others are against it,” Hafford said.

Massachusetts voted to increase the minimum wage last year to $11 by July 1, 2016, and most recently, Delaware raised theirs to $8.25 by June 2015 and West Virginia to $8.75 by 2016.


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