The Baltimore City Council is poised, for the second time this year, to take on raising the minimum wage to $15 per hour. The initiative, led by Councilwoman Mary Pat Clarke of North Baltimore, is a second attempt at a bill proposed in August of this year. Supporters of the wage increase have high hopes this time around. Three council members who opposed the bill in August have been replaced this election cycle with new faces who have pledged support for the bill.
Even with new members in the city council, the minimum wage increase still faces strong opposition. Most prominently, City Council President Bernard C. “Jack” Young has voiced his concerns. Young believes that the minimum wage in Baltimore should not be increased beyond $11.50 per hour. The Greater Baltimore Committee, a pro-business organization, and other opposition cite a survey done by the Baltimore Development Corp. which warned that a wage increase would stir some adverse effects on the city’s economy; of the 322 businesses surveyed, 97 said they would reduce hours for workers, 69 said they would lay off workers, 56 said they would close, and 33 said they would move out of Baltimore.
While the survey from the Baltimore Development Corp. paints a dismal picture for Baltimore’s economy, businesses have historically used these claims to prevent wage increases in the past. So, the question becomes how much of the survey is the result of businesses bluffing and how much actually stems from legitimate concerns.
To answer that, we can look to the first major city in the United States to increase their minimum wage to $15 per hour: Seattle. The University of Washington has recently published a study of the effects of the increased minimum wage by comparing the economic growth of the city and surrounding counties that have historically had similar economic trends.
One of the lead researchers, Professor Jacob Vigdor, summarized “that Seattle’s track record after increasing the minimum wage is neither as negative as some had feared nor as positive as some had hoped.”
However, Vigdor’s mediated findings can be attributed to the researchers’ attempt at staying as objective as possible. They leave the more pointed interpretations to non-affiliated scholars.
Jared Bernstein, a former chief economist to Vice President Joe Biden, wrote to The Washington Post boasting the success of the minimum wage hike. From the data presented by the University of Washington, Bernstein found that “the vast majority of low-wage workers end up with higher earnings.” While he admits that hours for some low-wage workers have decreased due to the wage increase, those workers are finding that, regardless of decreased hours, “their annual income often goes up.”
Bernstein adds that even when compared to the surrounding counties that have shared similar economic trends to the city, the difference in job growth is minimal. He concludes that the case study in Seattle solidifies the view of minimum-wage advocates: “most increases have their intended effect of lifting the pay of low-wage workers with little in the way of job losses.”
Contrary to Bernstein, Tim Worstall, a fellow at the Adam Smith Institute in London, presented a damning interpretation of the University of Washington’s data. Worstall emphasizes the fact that while Seattle’s employment of low-wage workers is growing, it is failing to keep up with the counties surrounding it. He views it as a simple matter of economics – “a rise in the price of something will lead to people purchasing less of that thing. So a rise in the price of low-skill labor will lead to employers purchasing less of low-skill labor.”
Analyzing how Seattle reacts to a minimum wage increase is helpful in gauging how one would play out in Baltimore, but it is not a guarantee that Baltimore will experience the same results.
The Baltimore Sun’s Editorial Board, days after Councilwoman Mary Pat Clarke announce that she intended to push for the $15 minimum wage again, published an opinion voicing their opposition. The main argument they make is that Baltimore is not like the other cities that have claimed victories in raising the minimum wage; Baltimore is not Seattle, New York, or Los Angeles.
The editorial board points out that “Baltimore's October unemployment rate of 6.1 percent was significantly higher than its neighbors, Baltimore (4.5 percent), Anne Arundel (3.7), Howard (3.3), Harford (4.0) and Carroll (3.4) counties, according to the Bureau of Labor Statistics.” Unlike the other cities that increased their minimum wages, Baltimore City does not have the luxury of being a bustling economy as compared to its neighbors.
There is no clear answer to the effects of a minimum wage hike. Economist are divided and the researchers at the University of Washington are equally as unclear. But I implore the city council to go forth and raise the minimum wage. The current economic state of this city is a gradual crawl of improvement. If this election cycle had a message, it would be that Americans are tired of waiting for change to happen; they want their leaders to take bold steps to jumpstart our economy. Raising the minimum wage is a gamble – but it is a gamble Baltimore is ready to take.
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