JOB OPPORTUNITIES TASK FORCE

Advocating better skills, jobs, and incomes

TO: Honorable Dereck E. Davis, Chair, and Members of the House Economic Matters Committee

FROM: Kevin Griffin Moreno, Senior Policy Advocate/Communications Director

DATE:             February 23, 2006

The Job Opportunities Task Force (JOTF) is an independent, nonprofit organization that promotes better jobs, skills training, and wages for low-skill low-wage workers and job seekers in Maryland. We support HB 1142 as a means of helping working families in Maryland escape poverty.

Last year the General Assembly took an important step in passing legislation to raise the state minimum wage from the federally mandated $5.15 per hour to $6.15 per hour. This will provide a much-needed boost to working families, stimulate consumer spending, and improve the productivity and competitiveness of Maryland employers. By indexing Maryland’s minimum wage to inflation, HB 1142 would make last year’s increase sustainable, thus improving the prospects of economic self-sufficiency from the estimated 60,000 working individuals in Maryland who are employed in minimum wage jobs.

As inflation increases, the value of the minimum wage declines correspondingly. Nationally, the buying power of the minimum wage has eroded by 17 percent, putting its value at the lowest level in over fifty years, according to the Economic Policy Institute. If Maryland does not index the value of the minimum wage to the rate of inflation, the State will soon find itself once again enmeshed in a political process to safeguard living standards for our lowest-paid workers and their families.

If the promise of HB 1142 is realized, Maryland would join four other states in committing to a long-term, reasonable solution to this challenge. Oregon, Washington, and Florida have already adjusted their minimum wage rates to account for inflation. Vermont will begin doing so in 2007, and Nevada is considering its own ballot initiative in 2006.

Preliminary research indicates that in these states, indexing the minimum wage to inflation has not had a harmful impact upon the state economy or the business community. In fact, Washington and Oregon have experienced significant job growth compared to the rest of the country following the passage of their minimum wage measures.

HB 1142 is a prudent, farsighted measure that would carry substantive benefits for low-wage workers and their families. By ensuring that Maryland’s least affluent workers will be better to meet the rising costs of living, the State would be making a significant investment in the health of its workforce and its economy. We encourage a favorable report.