Maryland’s General Assembly has been considering a bill that would increase Maryland’s minimum wage.[1]This bill was intended to help low-wage workers. Across the country, there have been various protests in effort to increase workers’ minimum wage.[2]
The new bill passed by the House intends to protect minimum wage workers. The current minimum wage for Marylanders is $9.25. The reasons people support an increased minimum wage is that it will likely reduce income inequality, it will save the government money, and it will improve people’s economic security.[3]While increasing the minimum wage will benefit low-wage earners, it also has the potential of increasing the unemployment rate and costing businesses to the point that many businesses will have to close down.
A recent study showed that when the minimum wage was increased significantly, the job loss skyrocketed.[4]Specifically, in Seattle, an adopter of a $15 minimum wage, a 2017 study showed when the wage increased to $13/hr, nine-months later 5,000 low-wage jobs disappeared, low-wage earners hours decreased, and their wages dropped by $6-million.[5]Likewise, California also increased its minimum wage significantly. A study released in December 2017 showed that there was a measurable decrease in employment, and that each 10% increase in minimum wage corresponded with a nearly 5% reduction in employment where there were minimum wage employees.[6]
Both the Governor and lawmakers need to consider recent studies before increasing Maryland’s minimum wage.[7]The NFIB used a regional economic modeling firm services to determine the projected impact of increased minimum wages.[8]Based on this firm’s findings, Maryland’s employment will be reduced by 99,000 jobs over a decade, and real output reduced by over $61billion.[9]
The new bill proposed in Maryland can have unintended consequences for both low-wage earners and small businesses. Increased wages will require small businesses to lay people off because of its inability to afford such cost. The domino effect that likely will occur is many small businesses closing down, which ultimately means low wage earners no longer having a job. Before passing this legislation, lawmakers need to ensure that every moving part affected by this legislation will prosper and will not be subjected to serious unintended consequences.
[1]MarylandReporter, Mike O’Halloran, National Federation of Independent Business,http://marylandreporter.com/2018/02/25/op-ed-the-unintended-victims-of-a-15-minimum-wage-are-small-businesses-and-their-employees/
[2]THE GUARDIAN, Ucilia Wang, What a $15 minimum wage means for US small businesses, , https://www.theguardian.com/business/2015/apr/15/what-a-15-minimum-wage-means-for-us-small-businesses.
[3]Alternet, Cap Action War Room/Think Progress, 10 Reasons to Raise the Minimum Wage (with Charts), https://www.alternet.org/economy/10-reasons-raise-minimum-wage-chartsamericannutritionassociation.org/newsletter/usda-defines-food-deserts.
[4]Supra n. 1
[5]Id.
[6]Id.
[7]Id.
[8]Id.
[9]Id.
Melisha Neal is a third-year day student at the University of Baltimore School of Law. She will graduate in May 2018. After graduating, she will accept an associate position at Alexander & Cleaver P.A. She looks forward to spending time with her family and running marathons in her spare time. She serves as a staff editor for the UB Law Forum and is also a member of the National Environmental Law Moot Court Team. Her interests include civil litigation and estate planning. She can be reached at mneal@alexander-cleaver.com You can view her LinkedIn at –
ublawforum.com 
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