In Support of a $15 Minimum Wage, and Against a Youth or Training Wage in Montgomery County

Testimony of Yannet Lathrop, National Employment Law Project, at Hearing before the Montgomery County Council, Maryland, with regard to Bill 28-17

September 26, 2017

Members of the Montgomery County Council, thank you for the opportunity to testify today. And a special thanks to Councilmember Elrich for introducing Bill 28-17.

My name is Yannet Lathrop, and I am a researcher and policy analyst at the National Employment Law Project (NELP).  NELP is a non-profit, non-partisan research and advocacy organization specializing in employment policy.  We are based in New York with offices across the country, and we partner with federal, state, and local lawmakers on a wide range of workforce issues. Across the country, our staff are recognized as policy experts in subject areas such as unemployment insurance, wage and hour enforcement, and—as is relevant for today’s hearing—the minimum wage. We have worked with dozens of city councils, state legislatures and the U.S. Congress on measures to boost pay for low-wage workers. We track both, the economic experience of state and local jurisdictions that have increased their wage floor, and the academic research on the minimum wage.  As a result, we have developed a strong expertise on the analysis of minimum wage policy.

NELP testifies in support of a $15 minimum wage for Montgomery County, the gradually elimination of the tipped subminimum wage, and the indexing of both to inflation so that the value of the minimum wage does not diminish over time. Bill 28-17 would do the former and the latter, but unfortunately, it falls short of addressing the need to phase-out the tipped subminimum wage in the County.

A $15 minimum wage will help workers in Montgomery County—which has some of the highest costs of living in the country—meet their basic needs. And phasing-out of the unjust tipped subminimum wage would ensure that tipped workers receive the same One Fair Wage as all other workers. Eliminating the subminimum tipped wage is, in fact, a crucial part of any minimum wage increase that seeks to make a real significant difference for low-wage workers. Because the complex subminimum wage system is difficult to enforce, it can result in widespread noncompliance and wage theft. Moreover, workers who are forced to rely mainly on tips for income—rather than on a stable base wage paid directly by their employer—face wide fluctuations in earnings as tips vary from season to season, shift to shift, and customer to customer. As a result, these workers have significantly higher rates of poverty than the rest of the labor force.

NELP also testifies against the youth and training wages, proposed separately in Bill 28-17 and by County Executive Isiah Leggett. The youth wage would discriminate against workers under 20 years of age by allowing their employers to pay them only 85 percent of the regular minimum wage for six months—a provision so harsh, that no other $15 minimum wage jurisdiction in the country has adopted. And a training wage, as proposed by the County Executive, would discriminating against workers of any age for the first 90 days of employment—a time when low-wage workers tend to be most economically vulnerable.

NELP urges the County to reject these and any other proposals than would exempt or adopt a lower minimum wage for young workers or establish a training wage.

If Montgomery County approves a $15 minimum wage, it would join a growing number of local jurisdictions across the country that have enacted or are pushing for similar policies. Nearly two-dozen cities and counties—from Washington, D.C. to Minneapolis to Flagstaff, Arizona—have already approved $15 wage floors, and other local campaigns are underway. In addition, two of the nation’s biggest states—California and New York—also approved statewide $15 minimum wage policies last year, while Oregon adopted a slightly lower $14.75 wage floor for most of the state. A growing number of other states are currently considering similar legislation.

The most rigorous modern research on the impact of higher minimum wages—including robust increases to $13 or more—shows that these polices boost worker earnings with little to no adverse impact on employment (including teen employment). The benefits for low-wage workers and their families have been significant, raising pay in the face of broader economic trends that have led to stagnant and falling wages across the bottom of our economy, reducing economic hardship, lifting workers out of poverty, and improving other life outcomes. The increased consumer spending triggered by higher wages can boost demand for goods and services, keep money circulating in the economy, and create a virtuous cycle that benefits workers, businesses and the County.

In the testimony that follows, I will summarize the evidence for these and other key points.

Read the full testimony here.