The “Fight for 15” campaign, largely bankrolled by labor union SEIU at an unsustainable expense of more than $100 million over the past four years, has lost steam after garnering gradual imposition of the targeted minimum wage in only a handful of cities and two states.
The tide is turning against this ill-advised push toward too-high minimum wage hikes. The effort has stalled and some jurisdictions have even undertaken or are considering reversals of planned increases. The detrimental effects have become evident and are prompting campaign stagnation as businesses shutter, consumer prices rise, jobs disappear and employment prospects for those most in need of work vanish.
Last Friday, Baltimore Mayor Catherine Pugh, a Democrat, vetoed an increase in the city’s minimum wage to $15 phased-in for most workers by 2022.
Without the new law, Baltimore’s minimum wage will increase to $9.25 an hour beginning July 1 when it rises throughout Maryland. The statewide minimum wage will then shoot up to $10.10 per hour on July 1, 2018, making it among the highest state rates and at the commonly designated threshold producing counterproductive results.
Pugh joined Maryland’s adjacent-to-D.C. Montgomery County Executive Isiah Leggett, also a Democrat, who successfully vetoed in late January an eventual $15 minimum wage. Officials in the adjoining Maryland county of Prince George’s, also bordering D.C., indicated last year they would not pursue a $15 minimum wage.
Although the Baltimore $15 minimum wage was supported by the required 12 of 15 City Council members necessary to override Mayor Pugh’s veto, it is now unlikely they will do so due at least one Council member already signaling a switch.
Pugh indicated her decision was based on the financial impact for the city government’s payroll and job-killing burdens for both non-profits and small businesses. She noted that the city’s 76,000 unemployed residents and 10,000 annually returning ex-offenders would bear the brunt of diminishing lower-skill and entry-level employment opportunities from job cuts, declining business development and current employers relocating outside the city.
Mayor Pugh referenced Baltimore becoming the “doughnut hole” within the surrounding region were the city to raise its minimum wage above the state level.
Although Mayor Pugh did not mention reports issued in recent days by the D.C. CFO, she could have. The Office of Revenue Analysis has projected that the city’s minimum wage increases to $15 will result in a loss of employment for fully 2-3% of District residents employed at D.C. businesses. In addition, 82 percent of the total job reductions at local businesses will be borne by D.C. residents due to a “commuter effect” requiring they compete with better-skilled suburban workers.
Among all states, only California’s $15 in 2022 and New York’s complex law rising to $12.50 in 2021 for most workers and increasing by the rate of inflation in future years until reaching $15 have been victories for the union’s political campaign. Only a very small number of cities, including usual ultra-left suspects San Francisco, Los Angeles, Seattle and D.C. – where politicians and virtue-signaling locals are more interested in generating splashy headlines than creating sensible policy – have approved increases toward a $15 minimum wage.
D.C. currently has the highest “state” rate at $11.50 per hour, rising to $12.50 on July 1 on a continuing schedule of increases that will reach $15 in 2020. The District is now the outlier in the region and most of the country.
The Congressional Budget Office and a decisive majority of prominent economists warn that once minimum wages rise above $10 a multiplicity of deleterious effects begin to outweigh benefits – as lower-skilled workers are “priced out” of local economies, and community small businesses begin reducing job positions to accommodate costs.
While 29 states and D.C. have set minimum wage levels above the federal amount, nearly all are only modestly above the federal minimum or levels lower than $10.
Mayor Pugh’s decision was smart and sensible, and the Baltimore City Council should sustain her veto.