WAMU: Do Increased Wages Hurt Or Harm The Economy? Maryland Business Owners Don’t Agree

By Ally Schweitzer
WAMU 88.5, March 11, 2019

One of the fiercest debates in Maryland’s General Assembly this year has revolved around how much workers should be paid to care for senior citizens, serve food and perform other tasks essential to the region’s economy and quality of life.

Business owners represented by the Maryland Chamber of Commerce have rallied against a pair of bills that would gradually raise the state’s minimum wage to $15, saying higher pay would harm small businesses and send jobs to nearby lower-wage states. But they’re countered by other business owners who say better pay creates more valuable employees, relieves pressure on the social safety net and fosters economic growth by putting more money into consumers’ pockets. ...

Brian England, who has owned a car repair business in Columbia since 1978, says employers that pay higher wages ultimately boost Maryland’s economy.

When employers pay [employees] more, “guess what [the workers have] got? They’ve got more money,” England says. “What are they going to do? They’re going to go and spend it somewhere else down the street. So the money goes ’round and ’round.”

England is part of the coalition Business for a Fair Minimum Wage, which has been backing both state and federal efforts to raise minimum wages to at least $15 per hour. Local affiliates of the group include Vigilante Coffee, &pizza and a local string of Ace Hardware stores.

Alissa Barron Menza, vice president of Business for a Fair Minimum Wage, says state legislatures are considering wage increases because Congress has kept the federal minimum at $7.25 for a decade, failing to keep pace with rising costs of living. Now, she says, even major employers like Costco, Target, Amazon and Whole Foods are embracing $15 minimums.

If big companies are paying more than federal law requires, Barron Menza says, small businesses must follow suit if they want to retain employees.

“For small businesses to survive and thrive in competition with large corporations and online companies with fast delivery, we’ve got to give them a reason to come into our stores and keep buying from us,” Barron Menza says. “That depends heavily on customer service, which depends heavily on employees that can afford to stick around and work for our businesses.” ...

Brian England, the auto repair shop owner in Columbia, believes low minimum wages cost governments more in the long run, because low-earning residents tend to require more social services funded with public dollars.

“We pay for [low wages] in tiny bits and pieces all over the place,” he says. “It adds up to be a small fortune.”

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