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Montgomery County Hikes Minimum Wage

MinimumwagebillsigningIkeSignsandtalkstoMarc.12.5.13

Last week Montgomery County Executive Isiah Leggett signed legislation significantly raising the county’s minimum wage.

The bill will raise the county’s minimum wage — which is now $7.25 — to $11.50 by 2017, including to $8.40 on Oct. 1, 2014.

It was sponsored by Councilman Marc Elrich (D-At Large) of Takoma Park, and co-sponsored by Council President Nancy Navarro (D-Dist. 4) of Silver Spring and Councilwoman Valerie Ervin (D-Dist. 5) of Silver Spring.

The County Council passed the bill on Nov. 26 by an 8-1 vote.

Councilman Phil Andrews (D-Dist. 3) of Gaithersburg voted against it.

The Montgomery County Republican Party condemned the move, saying it was well intentioned but will have negative economic effects and will help very few people. In a December 9 press release County GOP Chairman Michael Higgs wrote:

This is yet another example of the Democrats’ incessant and ill-conceived intrusions into the free market that harms our businesses, economy, and families.  Sound economic theory states that when you make something more expensive, you get less of it; making employment more expensive means that you will get less of it.  The free market will find an equilibrium regarding wages and prices; Governmental control of the means and manner of production is anti-free market and bad policy.  The intentions sound noble, but the real-world result will be less jobs to go around and even more government dependency.

According to the Bureau of Labor Statistics, in 2010 roughly half (49%) of all employees earning the federal minimum wage of $7.25/hr were teenagers or young adults age 24 or under.  Increases in minimum wage too often marginalize these new entrants into the workforce, and are a huge factor in our youth unemployment rate.  Of the other half (51%) age 25 and up, 24.8% of those minimum wage employees voluntarily work part-time, while just 34.3 percent of those 25 and over are full-time full-year employees.  The popular belief that most minimum wage workers are poor adults working full-time and trying to raise a family is largely untrue, as this group represents just 4.7% of the total minimum wage employees in the United States.

Some county businesses have stated that they will be forced to raise prices.

“I will probably be raising prices and wages in order to maintain a high quality standard and that’s what I need to do in order to continue,” said Tom Evans, owner of Evans Homes and Gardens in Gaithersburg. “Down the road there might be some wage pressure from the bottom as the bottom rises that we’ll have to raise our wage levels.”

One local restaurant owner says the increase comes at a time when economic woes are prevalent for both the employee and the employer.

“Today we have an economy where everybody’s trying to raise or increase the cost this is obviously a part of it considering how you budget for future years,” said Vincenzo Livia, Owner of Il Pizzico in Rockville.

A similar minimum wage hike was passed in Prince George’s County last month.

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