ANNAPOLIS, Md. (AP) — Maryland Gov. Wes Moore pushed lawmakers on Monday to increase the minimum wage to $15 this year — instead of waiting until 2025 — and allow annual increases that are tied to the cost of living.
Part of the measure that would tie future increases to the Consumer Price Index beginning in 2025 is coming under particular scrutiny. During a panel discussion with some business leaders who support the Democratic governor’s proposal, Moore acknowledged the challenge of persuading lawmakers to support it.
“Now, we know this is going to be a fight. We know this is not going to be simple. We know that this is going to take some convincing,” Moore, a Democrat, said. He noted some other states, including ones controlled by Republicans, already have moved to add automatic cost of living adjustments to minimum wage increases.
Eighteen states have approved automatic increases tied to some type of index, according to the National Conference of State Legislatures.
“They’ve adopted indexing already because their household income will keep pace with inflation and, importantly, businesses will get predictability,” Moore told the House Economic Matters Committee. “Index increases in wages are smaller. Business owners know when they are coming, and they can plan around them.”
The bill would increase the minimum wage to $15 in October, instead of Jan. 1, 2025, for businesses with 15 or more employees.
Maryland’s minimum wage went up to $13.25 in January. Under a law approved in 2019, it’s scheduled to reach $14 on Jan. 1.
Moore’s plan includes a hedge “against severe economic turmoil” by including a 5% cap on indexing, he told lawmakers. Also, the Maryland Board of Public Works can temporarily pause increases if necessary.
“But make no mistake, without indexing Maryland families will fall further and further behind over time,” Moore said.
Still, Republicans expressed wariness at the indexing component, which they are concerned could hurt businesses.
Del. Jesse Pippy, a Republican who is the House minority whip, questioned whether the measure would cause prospective employers to question whether they would want to come to Maryland.
“I think we have the same goals, but I’m concerned, I think with some of my colleagues here, that the indexing of the minimum wage could make it less attractive for an employer to want to be here, to want to do business here,” Pippy said.
Melvin Thompson, who represents the Restaurant Association of Maryland, said laws that increase costs of labor affect the restaurant industry disproportionately.
“Accelerating the phase in of Maryland’s $15 minimum wage will place additional burdens on restaurants and make it harder to fully recover from the pandemic on top of higher food and product prices due to inflation and ongoing supply chain issues,” Thompson said.
The indexing proposal was initially considered in 2019 in Maryland, when lawmakers approved phasing in increases over several years, but it was not included in the legislation that passed.
Senate President Bill Ferguson, a Baltimore Democrat, told reporters last week that “indexing is a tough issue.”
“I think that something will move forward, but I don’t think it will look the same way as it was introduced,” Ferguson said of the bill, adding that lawmakers are “trying to figure out a way forward that makes sense for both employers and employees.”
Maryland is one of 30 states with a minimum wage above the federal minimum of $7.25 an hour.