Madaleno calls for $15 minimum wage, phasing out tipped workers

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Sen. Rich Madaleno testifies on his minimum wage bill. MarylandReporter.com photo by Glynis Kazanjian.

By Glynis Kazanjian

For MarylandReporter.com

Sen. Richard Madaleno made his case to fellow lawmakers Wednesday to raise the state’s minimum wage to $15 by 2024, increase pay for disability caregivers and phasing out a tip-based payment system for workers in the hospitality industry.

“Raising the minimum wage to $15 would impact nearly 570,000 workers in our state,” Madaleno, D-Montgomery County, a candidate for governor, said. “Of those, 50% would be people of color and 55% would be women.”

Madaleno’s bill, SB543, would cost taxpayers $54 million in fiscal year 2020 and would increase to $243 million in 2023, according to the Department of Legislative Services.

While Senate Finance Committee members considered two other bills with varied versions of a $15 minimum wage, committee chairman Thomas “Mac” Middleton, D-Charles County, said it would be “unconscionable” not to include disability service workers in a wage increase while other employees were receiving one.

Sen. Brian Feldman, D-Montgomery, asked Madaleno as a statewide candidate how he views individual jurisdictions that want minimum wage increases, but that are at odds with his bill.

“The District of Columbia is on a path to $15,” Madaleno said. “ Virginia’s governor was elected on the promise of a $15 minimum wage.”

“This is an issue that resonates around the country,” he said.”There is strong political support [in Maryland] just not in Montgomery County for this. If we could get to $15, there are ways we could have a conversation about what would be potential guard rails for what could be local action.”

Major costs to small businesses

Business opponents testifying against the bill said they always hear people say how good it is for the economy to increase the minimum wage, so they said, they brought real-life examples with them to Annapolis.

“When the minimum wage increase to $10.10 goes into effect this year, it will mark a 39.3% increase in a four-year period,” Maryland Chamber of Commerce spokesman Lawrence Richardson Jr. said.

Richardson said that a $15 minimum would cost some companies tens of thousands of dollars more a year in wages.

“We have three members who provided information from Western Maryland,” Richardson said. “One’s a pizzeria. When that bill goes through, that employer with a staff of 30, including eight full-time employees, is going to see an increase in salary cost of $151,000.

“A coffee house with 11 employees, including four full-time employees, will see an increase of $45,000,” Richardson said. “And a company that’s been in business over 23 years with 42 employees will see an increase in labor costs of nearly $282,000.”

Children supporting families

But Baltimore City Councilwoman Mary Pat Clarke, D, said many of the children in her city work to help support their families.

“There are teens contributing to the rent and the costs of operating a family,” Clarke said. “This bill ends the exemption of youth from the full minimum wage. Many of the working poor families will benefit enormously.”

Baltimore City Councilman Kristerfer Burnett, D, said “babies are raising babies.”

In fact, Burnett said, he was raised by teenage parents who had him when they were 16-years-old. He said his parents worked at Wendy’s.

Burnett said raising the minimum wage would help get kids off the streets and help to halt the violence in the city.

“Right now young people get paid $200 a day to carry weapons and $50 a day to be lookouts,” Burnett said.

Montgomery County Councilmember Marc Elrich, who successfully spearheaded legislation bringing a $15 minimum wage to workers there starting in 2021, came to Annapolis to show his support for Madaleno’s bill.

“It’s not about whether it is worth $15 an hour to flip a hamburger,” Elrich, a former teacher, said to the committee. “It’s about whether the person flipping the hamburger can provide shelter, clothing and food for their families.”

Baltimore City Sen. Nathaniel J. McFadden’s bill, SB368, would increase the state minimum wage to $15 by 2026 for small businesses, defined as an employer with an annual gross income of no more than $400,000 or fewer than 50 employees, and by 2022 for all other employers.

Baltimore City Sen. Barbara Robinson’s, SB1019, would phase in a $15 minimum wage by 2024 for small businesses, by 2023 for midsize businesses and 2021 for all other employers.

All three bills call for the state minimum wage to be indexed to a regional inflation rate once it hits $15.00.

Tipped workers

Sen. Stephen Hershey, R-Upper Shore, challenged Madaleno’s plan to phase out tipped workers

“Explain to me why you’re focused on this,” Hershey said. “I understand the number of people that work in the restaurant service industry make well over a minimum wage when it comes to including their tips. . . Is there a consensus amongst those who work in the industry who want this?”

Madaleno said it was hard to gauge the industry as a whole, but a variety of western states including Arizona, Nevada and Washington passed tip elimination measures by ballot.

“I’m sure there are wait staff, tipped workers at establishments whose tips because of the underlying price of the food they’re serving provide them with an opportunity to have a joint salary above the minimum wage,” Madaleno said. “That’s how the tipped work exclusion is supposed to work.”

But it puts the onus on the workers to complain if they think they should be getting more, Madaleno said.

  • Dale McNamee

    And Madaleno wants to be governor… I wonder how much he tips those who wait on him at the restaurants that he visits ?

    Also, maybe he and the other legislators should be paid $15.00/hour ( for hours actually worked ) instead of their current salaries since it such a great wage… < sarcasm