February 24th, 2023
Chair Wilson, Vice Chair Crosby, members of the House Economic Matters Committee:
The Montgomery County Young Democrats (MCYD) strongly support HB 549, the Fair Wage Act of 2023, and urge your support for the bill. The Fair Wage Act of 2023 would accelerate the implementation of the state’s $15 per hour minimum wage and adjust that minimum wage for inflation. We also urge that HB 549 be amended to include tipped workers, so there is a $15 per hour minimum wage for all Maryland workers and no one is left out.
In 2019, the Maryland Legislature approved a $15 per hour minimum wage but decided to gradually phase in this increase over several years. At the time, Maryland’s minimum wage was $10.10 per hour and the Legislature voted to increase the wage to $15 an hour in 2025 for businesses with fifteen or more employees, and 2026 for smaller businesses. Anti-poverty advocates and organizers criticized this delayed implementation at the time. Based on a standard work week of 40 hours, a worker earning $15 per hour would make about $31,200 a year, which is not that much.
Governor Wes Moore has stressed the importance of fighting poverty and boosting the incomes of low-wage workers; during his campaign he promised to speed up the implementation of the $15 per hour minimum wage. The Fair Wage Act would fulfill that promise. It would fully implement that $15 per hour minimum wage for all covered employees by October 1st, 2023 instead of sometime in 2026.
HB 549 would also index the $15 per hour wage to the Consumer Price Index starting on July 1, 2025. It defines the Consumer Price Index as the index for all urban consumers for the Washington-Arlington-Alexandria, DC-VA-MD-WV urban area index published by the Bureau of Labor Statistics. This index shall be capped at 5% per year. In practical terms, this means that Maryland’s $15 per hour minimum wage will increase with inflation, greatly benefiting workers. The Maryland Legislature will not have to come back and vote again and again to hike the wage every few years; instead, it will go up automatically.
The Fair Wage Act of 2023 is an excellent bill that will help Maryland workers and boost wages. However it could be strengthened and improved by including tipped workers. Currently the bill does not include tipped workers, who are only required to be paid $3.63 per hour plus tips–an astonishingly low figure! By ending the egregious subminimum wage for tipped workers, many Marylanders would see higher wages–and this reform will help reduce decades of growing pay inequality. It would also help people achieve economic opportunity, because no one who works full time should have to live in poverty.
Affected workers who work year round would get a substantial raise because of this bill. They would earn hundreds or even thousands of dollars more per year, enough to make a tremendous difference in the life of a cashier, home health aide, or retail worker who struggles to get by. A $15 per hour minimum wage covering all workers would start to reverse decades of growing pay inequality between the most underpaid workers and workers receiving close to the median wage, and it would especially benefit Black workers and women workers. Higher wages would benefit consumers and communities across the country. Since underpaid workers spend much of their extra earnings, this wage boost would help stimulate the economy and spur greater business activity and job growth.
The Montgomery County Young Democrats urge the House Economic Matters Committee to strengthen HB 549, the Fair Wage Act, by amending the bill to include tipped workers and then supporting the bill. All Maryland workers deserve to be equally treated and to earn a living wage.
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