Another Attempt on $15 Minimum Wage in Montgomery County

Date: August 16, 2017

 

A $15 minimum wage proposal for Montgomery County was vetoed in January by County Executive Isiah Leggett, but the issue has resurfaced.

Council member Marc Elrich is sponsoring the revised bill, which would increase the county’s minimum wage from $11.50 to $15 per hour by 2020. There are a few exceptions: Nonprofit organizations, adult day-care providers, and businesses with fewer than 26 employees will have until 2022 to get to full compliance. Then, starting in 2023, the base wage would be tied to inflation for workers in the urban area.

Although the measure is intended to help low-income workers, the results of the study Leggett commissioned on the potential economic impact to the county suggests it will do otherwise. The study was done by economic consulting group PFM, and it found that Montgomery County would lose around 47,000 jobs by 2022 if the minimum wage is hiked to $15 per hour. PFM’s study showed that the county would lose $396.5 million in income by 2022, due to layoffs, reduced worker hours and benefits, and canceled or postponed plans to hire or expand.

Elrich and other proponents of the wage increase have been critical of the study’s results because PFM asked employers for their prediction on what would happen, which he says was bound to produce negative results. Another study from University of Washington economists, however, found that Seattle’s $15 minimum wage cost workers $125 per month thanks to reduced hours and layoffs. A different study from the University of California at Berkeley found different results—no job losses for minimum wage Seattle restaurant workers—when the minimum wage was slightly lower, at $13 per hour.

Respondents to PFM’s Montgomery County study estimated they would have to lower their minimum-wage workforce by 23 percent, on average, if the bill were to pass.

 

 

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