clock menu more-arrow no yes mobile

Filed under:

Maryland just became the sixth state to raise the minimum wage to $15 an hour

Democrats in Maryland just overrode the governor’s veto of the $15 minimum wage bill.

Demonstrators hold signs on the steps of the Maryland State House as people gather to rally for a $15 minimum wage on Wednesday March 13, 2019, in Annapolis, MD.
Workers rally for a $15 minimum wage outside the Maryland State House on March 13, 2019, in Annapolis, MD.
Matt McClain/The Washington Post via Getty Images

Maryland just became the sixth state to raise the minimum wage to $15 an hour.

On Thursday, lawmakers managed to override Republican Gov. Larry Hogan’s veto of a minimum wage bill. Maryland’s current minimum wage is $10.10, and the new policy will gradually raise the wage floor to $15 by 2025.

Hogan had blocked the bill earlier this week, claiming that such a change would “devastate” the economy. But it was clear early on that he would be unable to stop the national momentum building around a $15 minimum wage.

Democrats control both chambers in Maryland’s General Assembly, and passed the wage hike bill with a veto-proof majority. On Thursday, they overwhelming voted to override Hogan’s veto by 96-43 in the House and 35-12 in the Senate.

Maryland is now the third state to phase in a $15 minimum wage so far this year, and the sixth overall. In February, New Jersey and Illinois did so, too.

While Hogan’s veto was not surprising (he has always opposed a $15 minimum), it’s a striking position in a state where the $15 minimum wage is so popular with voters in Maryland and across the country.

The law will benefit about 573,000 workers in Maryland who currently earn less than $15 —about 22 percent of the state’s workforce, according to the National Employment Law Project.

Advocates for the wage hike didn’t get everything they wanted in the bill. For example, it won’t eliminate the lower wage for tipped workers, which is $3.63, and future changes to the minimum wage aren’t tied to inflation. The bill also continues to let businesses pay agricultural workers less than the minimum wage, and allows employers to pay young workers less, too.

But the push for a $15 wage is gaining support across the country, and has even reached Congress. For the first time ever, lawmakers on Capitol Hill are considering a bill that would raise the federal minimum wage to $15 an hour — another sign that the public pressure is paying off.

It all started with frustrated McDonald’s workers in Illinois

Passing the $15 minimum wage bill is still a major win for the fast-food workers whose movement helped 5 million workers get pay raises in 2019.

Within five years, they’ve transformed an improbable proposal into a popular policy — one that would address, in part, the slow wage growth American workers are experiencing.

The workers’ movement, called Fight for $15, organized strikes and rallies all across the country. But they saw little success until 2016, when California became the first state to hike hourly wages to $15, followed by Massachusetts, New York, and Washington, DC.

Business groups, meanwhile, are not happy about the fight for $15. And neither are their Republican allies in Congress. They’ve long pushed back against any effort to raise the wage floor at the federal level, claiming it would destroy small business and trigger massive job losses.

But it’s getting harder and harder for Republicans to justify their view that free-market capitalism — the idea that when the economy grows and unemployment is low, employers will be forced to raise wages — will take care of everyone. Workers who already earn $15 an hour still struggle to raise a family, so it’s no wonder that workers who earn less sometimes end up living on the streets.

On top of this, Americans want the government to raise the minimum wage. Poll after poll shows widespread support, even among Republican voters. And a majority of voters want it increased to $15 an hour. That may explain why Thomas Donohue, president of the US Chamber of Commerce, recently toned down his usual criticism of efforts to raise the minimum wage, saying the chamber is “going to listen.”

Even McDonald’s, long criticized by labor activists for paying low wages at franchises, said this week that the company would no longer lobby against efforts to raise the minimum wage.

The idea that raising the minimum wage is actually bad for workers is getting harder to support, as a growing body of research discrediting that claim emerges.

What research says about the impact of raising the minimum wage

There are few topics US economists have researched more than the impact of raising a minimum wage. Their findings have varied over the past 30 years, but there are two things most mainstream economists now agree on.

First, they agree that raising the minimum wage increases the average income of low-wage workers, lifting many out of poverty (depending on how big the raise is). Second, raising the minimum wage likely causes some job losses.

The remaining disagreement revolves around how extreme the job cuts would be.

Some research suggests hundreds of thousands of American workers could lose their jobs with a modest increase to the minimum wage. Douglas Holtz-Eakin, an economist at the conservative American Action Forum, has pointed to a 2014 study from the Congressional Budget Office which estimates that a $10.10 federal wage floor could lead to about 500,000 lost jobs because higher labor costs would lead some employers to scale back their staff.

Other research concludes that increasing the minimum wage has an insignificant impact on employment, or none at all.

The best way to evaluate the different conclusions is to analyze all the research findings together — what scientists call a “meta-analysis.” And the most recent ones suggest that the most likely impact on employment is minimal.

For example, a 2016 study by economists at Michigan State University crunched data from 60 research studies on the minimum wage in the United States since 2001. They concluded that a 10 percent increase in the minimum wage would likely reduce employment among low-wage workers from 0.5 percent to 1.2 percent.

Another meta-analysis comes in the form of a new research paper by economists at the University of Massachusetts, University College London, and the Economic Policy Institute. They studied data from 138 cities and states that raised the minimum wage between 1979 and 2016. The conclusion is that low-wage workers received a 7 percent pay bump after a minimum wage law went into effect, but there was little or no change in employment.

In a 2018 working paper, soon to be published in the American Economic Journal: Applied Economics, economist Arindrajit Dube shows that raising the minimum wage significantly reduces the number of families living in poverty. For example, he concludes that a $12 minimum wage in 2017 would have lifted 6.2 million people out of poverty.

This growing body of research has helped lawmakers across the country argue for a $15 minimum wage. Maryland residents are the latest to win their case.

Correction: A previous version of this article mistakenly summarized conclusions from a 2016 minimum-wage study by economists at Michigan State University. Researchers concluded that a 10 percent increase in the minimum wage would likely reduce employment from 0.5 percent to 1.2 percent among low-wage workers, not the overall workforce.

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.