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Opinion

Another view: The $15 temptation

Like congressional Republicans who attack studies showing how many people would lose health insurance if they repealed Obamacare, some Democratic lawmakers are in denial when it comes to the likely impact of a sharp increase in the minimum wage.

A case in point is Montgomery County, Maryland, where a majority of the all-Democratic County Council is pushing for a 30 percent minimum-wage hike, despite evidence it would cost thousands of jobs.

Some of those council members were gleeful this summer when a consulting group acknowledged computational errors in its estimate that roughly 10 percent of the county’s private-sector workforce – about 47,000 employees – would lose their jobs by 2022 if the minimum wage rose to $15 an hour by 2020 from the current level of $11.50. The consultant revised the estimate downward by about half, but not before higher-wage advocates dismissed the report, or any similar study that would survey county employers, as worthless.

In fact, any assessment of the economic impact of higher wages would be worth little if it did not somehow address the impact on businesses and their likely response. Economists at the University of Washington concluded recently that job losses and reduced hours cost low-income workers in Seattle an average of $125 a month after the city started phasing in a $15 minimum. Why would Montgomery fare better?

Despite the warnings, some Montgomery politicians are willing to gamble on job losses, especially as the political heat intensifies ahead of next year’s elections for council and county executive.

County Executive Isiah Leggett, D, who vetoed a $15 wage bill in January, now fears that slightly revised legislation may pass with a veto-proof majority. The revised bill, again sponsored by at-large council member Marc Elrich, who is running for county executive, would give small businesses – those with fewer than 26 workers – two extra years (until 2022) to comply; bigger firms would have until 2020.

Labor unions, whose clout in the county is considerable, are pressing hard for the higher minimum, which would be the first of that amount in any suburban locality in the United States. No doubt it would be a boon for some minimum-wage workers, who fill about 1 in 5 private-sector jobs in the county and struggle with the county’s high cost of living. But the trade-off – the potential loss of 20,000 or more jobs – would disproportionately hurt youth and minority workers.

Leggett, on the verge of retirement and intent on protecting the county from job loss, would postpone implementation for large businesses until 2022 and give small businesses – which he’d define more broadly, at fewer than 51 employees – until 2024 to comply. That would provide the vast majority of county firms a seven-year phase-in. Council members should take Leggett’s sound advice and resist the populist fervor that would put county jobs at risk.

The Washington Post

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