NELP Supports $15 Minimum Wage in Montgomery County & Gradual Elimination of Tipped Subminimum Wage

Washington, DC—The following is a statement from Christine Owens, executive director of the National Employment Law Project:

“Today, the Montgomery County Council introduced a bill that would raise the County’s wage floor to $15 by 2020 for employees of businesses employing 26 or more workers, and by 2022 for all others not exempted by state or federal law.

“The National Employment Law Project supports a $15 minimum wage in Montgomery County, Maryland, but calls for the Council to take steps to also gradually eliminate the subminimum wage for tipped workers, and to reject a provision that would allow the County Executive to stop the minimum wage increase under certain economic conditions.

“A $15 minimum wage in Montgomery County will bring relief to tens of thousands of struggling low-wage workers who currently earn as little as $11.50 hourly. The Washington, D.C. metropolitan area is one of the most expensive in the nation, with costs of living often surpassing income from low-wage jobs. In Montgomery County today, a single worker without family responsibilities needs to earn more than $21 per hour—nearly twice the current minimum wage—just to pay for the basics. Parents raising children need much more.  Tens of thousands of workers employed in the County would benefit from an increase to $15, a substantial number of whom are likely to be female, African American or Latino.

Scheduled Raises Should Proceed Without a Pause

“Unfortunately, the bill being considered by the council includes a harmful provision that would allow the County Executive to freeze this much needed raise if it decides that certain economic conditions have been met.  This ill-considered policy purports to help businesses and workers, but would end up hurting both. Rent and other costs of living do not stop climbing when the economy weakens. In fact, times of economic uncertainty are precisely when low-wage workers and their families need steady and predictable raises the most, and when individual businesses and the local economy need a boost in consumer spending to fend off the worst outcomes of a recession and to jump-start the economic recovery.

“Moreover, freezing a scheduled increase in the minimum wage makes no sense for Montgomery County, not only because in general, the County is economically strong and, along with the District of Columbia, is often spared the worst of a national recession, but also because unlike California—the first (and one of only four) jurisdictions to adopt a similar provision, on which the Montgomery County policy is modelled—it does not administer large-scale social services programs that employ a significant number of low-wage workers. California’s rationale for adopting a similar freezing provision was based on the potential for a multi-billion-dollar impact of a minimum wage increase on the state budget for state-funded human services jobs—chiefly, home health care services. Montgomery County does not administer similar large-scale county-funded social services program.

The Tipped Sub-Minimum Wage Should Be Phased-Out

“The Council must raise the sub-minimum wage for tipped workers to match the full minimum wage.  There are nearly 20,000 tipped workers in Montgomery County, including restaurant servers, parking lot attendants, manicurists and others whose employers can pay as little as $4, with tips expected to make up the difference.   Living primarily on customer tips is extremely precarious and unstable, and these workers live in poverty at more than twice the rate of the overall workforce. Other local jurisdictions that have recently increased their wage floors to $15 or more also raised the minimum wage for tipped workers to $15–including Flagstaff, Arizona, Minneapolis, and numerous cities and counties in California.

The Youth Sub-Minimum Wage Should Be Eliminated

“Finally, the Council should approve a strong $15 minimum wage bill that does not discriminate against younger workers. Under current law, workers under the age of 19 are excluded from the County minimum wage, and unfortunately, the bill maintains this exemption.

“Youth minimum wage exemptions treat younger workers differently from the rest of the workforce, which mainly benefits big businesses with high turn-over staffing models, often at the expense of mom and pop shops and more conscientious employers. As a result, these provisions incentivize other businesses to adopt high-turnover business models, and hurt low-wage adult workers who may be replaced with a cheaper and younger workforce. They also ignore the real economic needs and contributions of younger workers: Low-wage young workers are more likely to be from struggling households who depend on the additional incomes to make ends meet. Or they may be students working their way through college with limited family support. It is estimated that college students in Maryland need to earn a minimum of $16 per hour to afford in-school tuition and fees.

“Often, the reasons cited for the discriminatory treatment of young workers is the erroneous assumption that higher minimum wages lead to youth unemployment. However, rigorous research on the impact of the minimum wage on teens—which compares teen employment levels across regions and states with differing minimum wage rates—shows that higher minimum wage rates do not cause employers to hire fewer teens.

“The dismal prospects presented by rising costs of living and falling or stagnant paychecks are two factors that have pushed more than two dozen states and localities to raise their wage floors to $15 since the Fight for $15 began in 2012. Nearly 10 million workers nationwide will benefit from these measures, and in the coming years, workers will receive more than $40 billion in additional income from minimum wage increases to $15. These states and cities include regions of the country with similar high cost of living as Montgomery County, including the District of Columbia, Los Angeles, San Francisco, Seattle, and New York.

“Montgomery County can be a part of this rising trend if the County Council votes to raise the wage floor to $15 and to gradually eliminate the tipped subminimum wage.”


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