PMD Montgomery Responds To Timeline Extension Amendment To Minimum Wage Bill, 28-17

If there is one conclusion garnered from the October 9th hearing on HHS bill 28-17, it is that PMD Montgomery is contending with a classic “all-or-nothing” dilemma. As the Council voted on October 9th to extend the timeline for the $15 minimum wage to 2022 for large businesses and to 2024 for small businesses, the County minimum wage as it stands will continue to lag behind the livable minimum in accordance with the consumer index. As the list of delays, revisions, and exemptions amended to Bill 28-17 grows, so do our doubts that the bill will maintain the integrity of its original intent by the time it is passed. Faced with the decision between pushing against the recent amendments and supporting what can best be considered a smaller step in the right direction, our best option may be to accept the most in terms of progress towards the livable wage standard that the current County Council will pass this year. After we must continue our push for improvements to the bill through the next year and with the incoming Council after 2018. 

Impassioned, but Flawed

Councilmember Craig Rice led off the opposing argument to the original bill with an impassioned harkening to the youth unemployment that plagues upcounty minority and immigrant residents. While Rice emphatically pointed out that the problems facing youth of color would not be solved by raising the minimum wage, the councilmember did not explain how the bill as proposed would exacerbate the aforementioned problem, nor did he explain how this conclusion factored into the actual intentions of the bill, which councilmember Tom Hucker pointed out. Hucker reminded the Council and the County Executive representative that the bill’s intention is ultimately to provide a livable wage as the floor for all full-time workers in the County, not to solve every problem associated with youth and minority unemployment.

While Rice may have based his conclusion on the premise that unemployment would rise if the minimum wage increased, councilmembers Marc Elrich and George Leventhal had previously countered these claims with employment statistics following the minimum wage increases over recent years. On this premise, Rice may argue that a lower “opportunity wage,” which the Council sought to clarify as 85% of the County minimum wage, would incentivize employers to hire the youth demographic the councilmember had described. Elrich and Leventhal, however, suggested that employers may ultimately lay off youth employees as they “age out” of the exemption. Elrich reminded the Council on the cycle of poverty and poor decision making, a topic which he has gone into great detail with me in our previous discussions about the sustainability of a minimum wage for those who are simultaneously working full time while pursuing upward mobility. 

Dangerous Reasoning

The Council addressed Rice’s proposal to include employment programs targeting youth of color as a component of the bill. In a meeting with Progressive Maryland that followed the hearing, however, Elrich and Hucker confirmed that Rice was yet to propose such a program. Likewise, Elrich steers Rice’s arguments back towards the matter at hand, that being the timeline extension to 2022 and 2024. If raising the minimum wage were to deter employers from hiring youth, Elrich argues, there would be no indication that delaying the process would make a difference with respect to youth employment. Councilmember Hucker ultimately called attention to the disconnect between Rice’s concern for youth unemployment and his opposition to the bill. If youth unemployment were the decisive factor for Rice’s support or opposition to the bill, the Council has welcomed amendments to address the issue. Otherwise, Rice’s main cause for opposition carries little relevance to the bill’s intention.

The Small Business Argument

Berliner, meanwhile, offered a statement of general concern catered to both sides of the issue. The District 1 councilmember spoke highly of the need to move towards a $15 minimum wage and target “obscene economic inequality” while enabling small businesses to thrive. Berliner highlighted, however, that Montgomery County would not mirror Seattle, Los Angeles, or New York in its implementation; no major county has passed a comparable wage increase without support from the state. The progress towards $15, Berliner argued, “has always been about pace.” Berliner ultimately voted to extend the timeline for the $15 minimum wage implementation, which passed without votes from Hucker, Elrich, or Leventhal. 

Debunking “Junk Science”

Leventhal’s opening comments, however, regarded the timeline issue with numerical precision. Employment data for County has shown consistent trends of decreasing unemployment as the minimum wage has edged closer to $15. An ideal timeline would be found through a calculation which optimizes the acceleration of wage increases and positive employment growth. None of the available data supports the conclusion of the largely debunked PFM study with its alarmist conclusions about job loss. Leventhal went so far as to call for a refund on the “junk science” study.

“Junk science” aside, Berliner’s warnings about an accelerated timeline were based on his assessment that Montgomery County should be comparable with Minneapolis in its implementation timeline. As Elrich points out in Seventh State, however, the costs of living in Montgomery County outpace those in Minneapolis in most categories. Housing, in particular, has a striking disparity, with MoCo costs nearly doubling those of Minneapolis. Based on the living wage calculator from MIT, a Montgomery County resident “would need between $570-655/month more than a Minneapolis resident to pay the difference in housing costs.”

The calculations project that a single adult in 2017 would need a minimum of $15.80 per hour to pay basic living expenses in Montgomery County, versus $11.36 in Minneapolis. The assessment even corrects the assumption that the Minneapolis schedule would soften the impact on small businesses. According to the trajectory based on the departure from the current minimum wage for small businesses to $15 per hour, Minneapolis is attempting to increase at a faster rate than the original Montgomery County proposal. Minneapolis small businesses are scheduled to increase the wage by $7.25 over 7 years. Montgomery County small businesses have less than half the difference to make up - $3.50 - over five years, which amounts to only 70 cents per year. In other words, if the Minneapolis schedule is held as the standard, Montgomery County small businesses have nothing to worry about.

Nevertheless, the timeline delay passed. 

What Comes Next?

Coming away from the hearing and our follow-up meetings with Elrich and Hucker, PMD Montgomery acknowledges that the bill will likely be watered down to the extent that the compromises severely inhibit its effectiveness at implementing a living wage as the floor for full-time employees in the county. Discussions are being held with councilmember Sidney Katz to gauge his potential to be swayed to support a bill closer to its original form. As the final vote is scheduled for November 7, we prioritize the passing of a $15 minimum wage bill with as few extensions and exemptions as possible. Given the apparent concessions necessary to garner the veto-proof, six-vote majority, PMD Montgomery’s long-term priority is that the 2017 version of the wage increase schedule be a work in progress.

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