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August 2 2017

Study: MD County to Lose 47,000 jobs because of $15 Minimum Wage

by Patrice Lee Onwuka

Montgomery County is taking another bite at the $15-minimum-wage apple after the county executive vetoed their last attempt. A new study of the economic impacts of this wage provides fresh and compelling evidence that this increased payrate will drive low-wage, vulnerable workers right out of their jobs.

After County Executive Isiah Leggett vetoed a minimum wage hike in January citing concerns that the vast majority of jobs lost would be low-wage positions, he commissioned a study. According to the findings released yesterday, he is very right.

Montgomery County, one of the most affluent counties in the U.S., is projected to lose approximately 47,000 jobs by 2022, starting with a loss of 18,000 jobs in 2017, if the minimum wage is increased from its current level of $11.50 an hour. Some 45,300 of the jobs (nearly all) will be low-wage positions.

On net, the county would lose nearly $400 million from 2017 to 2022. This is the net of lost income from those who will lose their jobs and income from those who receive higher take-home pay as a result of the increased wage.

According to responses from the businesses, nearly two out of three (63 percent) say they are very likely to reduce hiring, 60 percent are very likely to reduce hours per employee, 57 percent to lay off workers, 52 percent to decease benefits, and half to increase experience required from employees.

The report points to benefits of the minimum wage including higher productivity and morale, improved mental health, reduced hunger, and decreased stress for workers and their families.

However, it’s clear that low-wage, low-skilled workers will get the short end of the stick. The question is whether county leaders are okay helping some to hurt a lot more.

This study comes at a critical moment. Last week, a county council member reintroduced legislation to hike the county’s minimum hourly wage from $11.50 to $15 by 2020 for most employers. Although the bill passed last year, it was not a veto-proof majority. Taking into consideration concerns from opponents, the new bill gives nonprofit organizations, adult day-care providers, and small businesses with fewer than 26 employees an extra two years to comply.

The bill sponsor tried to undermine the results of this research even before it was released calling it “nonsense” and he reiterated his stands even after the damaging results were revealed.

County Executive Leggett responded that even if the research overestimated job losses, the conclusions cannot be ignored:

“We can’t minimize some of the impacts outlined here,” said Leggett, who explained his decision to veto the earlier bill by saying he was worried that the wage hike would hurt the county’s economy. “Even if it’s not 47,000 jobs lost, even if it’s half that, those are some startling numbers. You can’t discount ­it all.”

Leggett is absolutely correct. Pushing harmful policy to score political points at the cost of poor workers and vulnerable families already in an uphill battle, is unjustifiable.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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