HHS Item 1
November 21,2013
Worksession
MEMORANDUM
November 19, 2013
TO:
FROM:
Health and Human Services Committee
Robert
H.
Drummer, Senior Legiltive
Josh Hamlin, Legislative Attorne
Jacob Sesker, Senior Legislative
at st
~
Attome~
'
SUBJECT:
Worksession:
Bill 27-13, Human Rights and Civil Liberties - County Minimum
Wage Dollar Amount
Expected Attendees:
James Stowe, Director, Office of Human Rights
Steve Silverman, Director, Department of Economic Development
Judith Hellerstein, PhD, Professor, Department of Economics, University of Maryland
Harry Holzer, PhD, Professor, School of Public Policy, Georgetown University
Bill 27-13, Human Rights and Civil Liberties
County Minimum Wage - Dollar
Amount, sponsored by Councilmembers EIrich, Ervin and Council President Navarro, was
introduced on October 1. A public hearing was held on October 24.
Bill 27-13 would:
• require certain private sector employers in the County to pay a minimum
wage to employees working in the County;
• provide a credit for an employer who provides health insurance to
employees working in the County;
• provide enforcement by the Office of Human Rights and the Human
Rights Commission;
• authorize the Human Rights Commission to award relief for violations;
and
• generally regulate the minimum wage paid to a private sector employee
working in the County.
Background
Maryland's minimum wage is $7.25 per hour, or $15,000 a year for a full-time, year
round worker, and leaves a full-time earner and their families below the Federal poverty line.
Twenty-one states have raised their minimum wages above Maryland's rate, including Alaska,
Arizona, California, Colorado, Connecticut, Florida, Illinois, Maine, Massachusetts, Michigan,
 PDF to HTML - Convert PDF files to HTML files
Missouri, Montana, New Mexico, Nevada, New Jersey, New York, Ohio, Oregon, Rhode Island,
Vennont, and Washington, as well as the District of Columbia.!
Bill 27-13 would establish a County minimum wage for private sector employees
working in the County unless the State or Federal minimum wage is higher. The County
minimum wage would be phased in over 3 years. The rate would be $8.25 per hour on July 1,
2014, $9.75 per hour on July 1, 2015, and $12.00 per hour on July 1, 2016. (As noted below,
Councilmember EIrich has proposed an amendment to reduce the $12.00 amount to $11.50.)
During the phase-in period between July 1,2014 and July 1,2016, an employer would be able to
pay the prior year rate for an employee's first 90 days on the job. Beginning on July 1,2017, the
$12.00 rate would be raised by any increase in the Consumer Price Index on an annual basis.
The County minimum wage would not apply to a worker who is not covered by the State
minimum wage, a tipped employee, or a worker eligible for an opportunity or youth minimum
wage under the State or Federal law.
Bill 27-13 would also encourage employers to provide health insurance by giving an
employer a credit for the cost of the employer's share of the health insurance premium per
employee. The County Office of Human Rights would be responsible for enforcement of the
law. A worker would be able to file a complaint with the Office of Human Rights and obtain an
adj udicatory hearing before the Human Rights Commission.
Legal Authority
Montgomery County can enact its own minimum wage law even though the State of
Maryland has a minimum wage law. In
City of Baltimore
v.
Sitnick,
254 Md. 303 (1969), the
Maryland Court of Appeals upheld a city ordinance establishing a minimum wage standard that
was higher than the State standard. In that case, the plaintiffs argued that State law had
preempted the field of minimum wage. In rejecting that argument, the Court held that the City of
Baltimore could enact its own minimum wage law based on the city's exercise of concurrent
power because the city law did not conflict with the State law. The County Attorney's Office
recently issued an opinion similarly concluding that the County has the authority to enact a
County minimum wage. See ©9-12.
A Regional Approach
Similar bills have been introduced in Prince George's County and the District of
Columbia that would increase the minimum wage in those jurisdictions to at least $11.50 per
hour over the next 3 years. Councilmember EIrich indicated that he will request an amendment
to Bill 27-13 to reduce the minimum wage from $12.00 per hour to $11.50 per hour to be
consistent with the bills in Prince George's County and the District of Columbia.
New Jersey will become the 20
th
State to raise the minimum wage above the Federal minimum wage of$7.25 per
hour in 2014.
I
2
 PDF to HTML - Convert PDF files to HTML files
Fiscal and Economic Impact
The OMB and Finance Fiscal and Economic Impact Statement is at
©
13-19. OMB
estimated that the Office of Human Rights would need to hire an additional 3 investigators to
handle minimum wage complaints at an annual cost of $346,980. OMB also estimated that the
revenue from civil fines ordered by the Human Rights Commission could reach $87,500 to
$125,000 per year.
Finance noted that economists disagree on the potential economic impact of an increase
in the minimum wage. In addition, available Bureau of Labor Statistics employment data does
not single out Montgomery County. Finance was unable to predict the economic impact of the
Bill.
Public Hearing
Thirty-eight people testified at the October 24, 2013 hearing, presenting a number of
perspectives on the Bill. Supporters frequently cited the inability of workers making the
minimum wage to be self-sufficient in the County. Some supporters said that County social
safety net benefits amounted to a government subsidy of businesses that rely on low-wage labor.
Peter Davis of the Center for the Study of Responsive Law said that "when big businesses do not
pay a living wage, low-wage workers become more reliant on public programs to get by and
taxpayers end up footing the bill." Some speakers indicated a need for a higher minimum wage
in Montgomery County. Stating that "as a County, we have an exceedingly high cost of living,"
LaTonya King of Progressive Maryland said that "here in Montgomery County we need to go
further" than an increase in the State minimum wage.
Several speakers spoke in favor of the Bill but requested amendments. Specifically, the
following amendments were requested by several of the Bill's supporters: 1) apply the County
minimum wage to tipped workers; 2) remove the health insurance credit; and 3) remove the
ability to pay a lower wage during an employee's first 90 days during the transition period.
Many opponents of the Bill said that the minimum wage should not be raised at the
County level, but rather at the State or Federal level. They reasoned that a County increase
would put businesses in the County at a competitive disadvantage, even with other counties
within the State. Several speakers cautioned that the proposed increase at the County level could
result in County residents facing more competition for low-wage jobs from out-of-County
residents. Concerns were also raised that an increase in the minimum wage would result in
employers reducing the number of employees, the number of hours employees work, or benefits
provided to employees. Some small business owners indicated that it would be difficult or
impossible for their businesses to absorb the additional cost associated with the proposed
Increase.
"Wage compression," the narrowing of the gap between the pay for the lowest skilled and
paid workers and the pay for higher skilled and paid workers, was another oft-cited concern
among the speakers opposed to the Bill. The alternative is to give pay increases up the wage
scale. Marilyn Balcombe of the Gaithersburg-Germantown Chamber of Commerce argued that
"if you increase the minimum wage from $7.25 to $11.50, you must increase the wages of
everyone in the salary structure." Opponents also questioned whether the minimum wage is
3
 PDF to HTML - Convert PDF files to HTML files
intended to be a living wage. Lynn Martins of Seibel's Restaurant said that "the minimum wage
is not meant to be a wage to raise a family on." This sentiment was echoed by Jeff Owens of
Clyde's Restaurant Group, who said that the "minimum wage is not a breadwinner's wage, but
rather a new worker's wage to gain a first job experience."
Issues
1.
How might the economy absorb an increase in the minimum wage?
Some labor economists perceive that there is monopsonistic competition in the low-skill,
low-wage labor market-the buyer (employer) has a disproportionate amount of power in the
market for low-wage, low-skill labor. Governments respond to this imperfect market by
requiring employers to pay minimum wages-the results of which may include increased
employment (by increasing an individual worker's incentive to work), increased economic
activity, and reduced poverty. Other economists argue that the labor market is competitive, and
that government interference in the labor market harms both employers and employees by
requiring employers to pay a wage that exceeds the marginal value of labor. These economists
argue that the minimum wage thereby results in reduced demand for labor, leading to reduced
employment.
The following is a summary of the economic channels through which an increase in the
minimum wage might flow:
Earnings:
Hourly wages for individual employees earning below the new minimum wage
would increase. Increasing the wage in the first year from $7.25 to $8.25 would clearly increase
the hourly wage of workers earning $7.25 by $1.00 (j13.8%). Employers may respond to
changes in the minimum wage by reducing the hours of their employees-if wages are increased
by 13.8% and hours are reduced by 13.8% then the employee will not experience an increase in
earnmgs.
Wage compression:
While it is easy to calculate the increase in hourly wage for a worker
earning the minimum wage, it is less clear what effect an increase in the minimum wage would
have on those workers currently earning $8.00 Gust below the minimum wage) or $8.50 Gust
above the minimum wage). Employers required to pay a higher minimum wage may compress
wages for workers earning above the minimum wage. In their study of the impacts of the 2007­
2009 increases in the Federal minimum wage on restaurants in Georgia and Alabama, Hirsch,
Kaufman and Zelenska found that almost half of the employers that they interviewed said that
they would delay or limit pay increases or bonus pay for more experienced employees as a result
If you tuned out at
monopsonistic
here is the short version: whereas in a monopoly a very small number of sellers
enters a market place with many buyers, in a monopsony a very small number of buyers enters a market place with
many sellers. In the low-wage, low-skill labor market there are many more or less interchangeable sellers of labor
(potential workers), and relatively few buyers (employers). That under some circumstances employers have an
advantage in this marketplace is an idea that is older than West Virginia-John Stuart Mill first opined on this topic
in 1848.
2
4
 PDF to HTML - Convert PDF files to HTML files
of the increase in the Federal minimum wage.
3
Broad empirical studies of US economic data
have also indicated that the minimum wage compresses wage distribution (see, e.g. DiNardo,
Fortin, and Lemieux 1996).4
Employment:
There is substantial disagreement among labor economists with respect to
the economic and employment impacts of a minimum wage.
See ©20-21 Washington Post,
"Economists disagree on whether the minimum wage kills jobs. Why?"
For example, one think
tank (the Economic Policy Institute) projected that the 2013 Harkin-Miller proposal-to increase
the Federal minimum wage to $10.10 per hour-would increase total employment in Maryland
by 2,000 FTEs.5 Another think tank (the Employment Policies Institute) projected that the 2012
Harkin-Miller proposal-to increase the Federal minimum wage to $9.80 per hour-would
reduce total employment in Maryland by approximately 3,800 to 11,500 jobs.
6
Teen employment:
Neumark and Wascher observed that past studies of the impacts of the
minimum wage found that employers respond to an increase in the minimum wage by decreasing
employment of younger workers.
7
Critics of Neumark and Wascher's work tend to point to the
subjectivity involved in selecting which studies to include in the analysis, and to the fact that
many of the studies involved were measuring the effect of a statutory minimum wage in the UK
rather than in the US. A different 2009 meta-study of 64 minimum wage studies published
between 1972 and 2007 tried to measure the impact of minimum wages on teenage employment.
The authors (Doucouliagos and Stanley) graphed employment estimates and found that the most
precise estimates were heavily clustered at or near zero effects on teen employment.
8
Workforce composition:
Allegretto, Dube and Reich (2011), in their study of employment
from 1990-2009, found no statistically
si~nificant
effect of the minimum wage on teens as a
whole or on white, black, or Latino teens. In a separate study, Dube, Lester and Reich (2012)
found no evidence that employers changed the age or gender composition of the workforce in the
restaurant sector in response to changes in the minimum wage.
10
Efficiency:
While the direct quantifiable evidence is sparse, Hirsch, Kaufman and
Zalenska found in their interviews with restaurant managers in Georgia and Alabama that about
90% of managers planned to respond to the minimum wage increase with increased performance
standards (requiring better attendance and punctuality, raising productivity expectations, faster
termination of poor performers, etc.).
Minimum wage channels ofadjustment.
IZA DP 6132.
http://www2.gsu.edui-ecobth/IZA HKZ
MinWag~~..9A
dp6132.pdf
4
Labor market institutions and the distribution of wages: 1973-1992.
http://www2.gsu.eduf.-ecobth/IZA HKZ MinWageCoA dp613'.pdf
5
Raising the minimum wage to $10.10 would give workingfamiles, and the overall economy, a much needed boost.
http://www .epi. org/publ ication/bp3 57-federal-m in
i
mum-wage- increase/
6
The impact of a $9.80 Federal minimum wage. http://www.epionline.org/studv/rl43!
7
Minimum wages and employment.
IZA DP No.
2570. I)ju;1:/lfrn",.l.:f:1b..9.rg!j.!Q257QJ2.9J
8
Publication selection bias in minimum wage research: A meta-regression analysis.
http://www.deakin.edu.au!busJaw/aef/workingpapers/papers
12008
14eco.pdf
9
Do minimum wages really reduce teen employment? Accountingfor heterogeneity and selectivityin state panel
data.
http://www.irle.berkelev .edu!workingpapers! 166-08.pdf
10
Minimum wage effects across state boundaries.
http://www.irle.berkeley.edu!workingpapers/157-07.pdf
3
5
 PDF to HTML - Convert PDF files to HTML files
Turnover:
Typically the turnover rate among low-wage employees is high and the cost to
employers is high (in recruitment/screening costs, training, lost efficiency). Turnover is reduced
when wages are higher. The savings that accrue to the employer as a result of reduced turnover
may offset a portion of the cost of the wage increase. Dube, Lester, and Reich used a contiguous
counties approach to study the effect of differences in minimum wages on teens and restaurant
employees across U.S. counties. They find "evidence that separations, new hires, and turnover
rates for teens and restaurant workers fall substantially following a minimum wage increase."
Motivation:
A higher minimum wage may motivate workers to work harder independent
of any actions by employers to improve productivity. Because higher pay increases the cost to
workers of losing their job, workers may work harder (increase productivity) to keep their job.
Non-wage benefits:
Most low-wage workers receive few non-wage benefits. Card and
Krueger, in their seminal study of the labor market behavior of restaurants in response to an
increase in New Jersey's minimum wage in the 1990s, observed that the nonwage benefit most
frequently offered was free or reduced price meals.
II
Their study indicated that restaurants did
not respond to an increase in the minimum wage by changing their free or reduced price meal
benefits. A more recent study by Simon and Kaestner (2004) found small or no effect on non­
wage benefits.
12
Training:
There is no conclusive empirical evidence that an increase in the minimum
wage affects the amount of training that employees receive or the amount that employers expend
on training. Neumark and Wascher tend to find negative effects of minimum wages on training,
but they acknowledge that most other recent research finds no evidence of an effect. Some
economists have the perspective that employers might respond to an increase in the minimum
wage by increasing training (i.e., to raise productivity to a level befitting the new higher wage).
Increased demand:
The minimum wage has the effect of transferring income from
employers, who generally have a high savings rate, to employees, who generally have a low
savings rate. This transfer could spur additional consumer spending, with the result being an
increase in GDP and employment.
Pricing:
Some employers might choose to increase prices in response to an increase in
the minimum wage. One review of studies (Lemos, 2008) concluded that "most studies
reviewed...found that a 10% US minimum wage increase raises food prices by no more than 4%
and overall prices by no more than 0.4%.,,13 Other studies have reached different conclusions­
for example, Dube, Naidu and Reich found that prices "increased significantly" at fast food
restaurants, but not at table service restaurants.
14
Minimum wages and employment: A case tudy ofthe fast food industry in New Jersey and Pennsylvania.
http://davidcard.berkeley.edu!p;mers!nimin-aer.pdf
12
Do minimum wages affect non-wage job attributes? Evidence on fringe benefits and working conditions. NBER
Working Paper
9688. http://www.nber.org/papers/w9688
13
The effect oJthe minimum wage on prices. IZA DP No.1 072.
http://ftp.iza.orgldpl
on.
pdf
14
The economic effects of a citywide minimum wage.
http://eligitalcommons.
i
Ir.comell.edu/cgi/viewcontent.cgi?alticle"" ]293 &context=i
Irreview
II
6
 PDF to HTML - Convert PDF files to HTML files
Profits:
Firms could accept reduced profits in response to an increase in the minimum
wage. There has been very little study of this in the United States, though a study of the impact
of a British minimum wage law found that profitability was negatively affected by introduction
of a minimum wage.
2. What has been the effect of increasing the minimum wage in other cities, such as San
Francisco and Santa Fe?
Schmitt and Rosnick (2011) studied wage and employment effects of local minimum
wage laws in Washington (DC), San Francisco (CA), and Santa Fe
O~M).15
Overall, their
findings were consistent with the view that modest changes in the minimum wage have little
effect on employment. In Santa Fe, it appeared that hours fell, but not enough to offset the
increased hourly wage. In San Francisco, wages increased without a statistically significant
change in employment. In both cities the minimum wage laws included small business
exemptions or phased-in increases in the minimum wages small businesses were required to
pay-the evidence did not suggest that small firms react differently to an increase in the
minimum wage than larger firms.
3. Which occupations are most likely to be affected by an increase in Montgomery
County's minimum wage?
The Montgomery Business Development Corporation submitted analysis prepared by the
University of Maryland. Using data derived by Economic Modeling Specialists IntI. (EMSI), the
analysis indicates that 11.7% of Montgomery County total employment earns a wage under
$121hour (77,000 workers), some of whom would not be affected by this bill. Approximately
7.7% and 9.2% of total employment earns less than $12lhour and is not exempt under the bill
(roughly 50,000 to 60,000 workers). See © 22-23.
According to the analysis, the proposed 2014 increase from $7.25/hour to $8.25Ihour
would affect only 0.04% of employment in the County. In 2015, when the minimum wage is
increased from $8.25/hour to $9.75Ihour, between 0.04% and 1.28% of employment will be
affected. In 2016, when the minimum wage is increased from $9.75 to $11.50, 4.4% to 5.7% of
employment would be affected.
The EMSI data illustrates that most of the employees likely to be affected over the three
year phase-in are in the following general occupations: restaurants/food service, housekeeping
and maids, and cashiers. The American Community Survey finds similar results-Montgomery
County occupations with the lowest median annual earnings (as distinct from hourly earnings)
include food preparation, grounds cleaning and maintenance, personal care and service, material
moving and health care support. See M-NCPPC analysis of ACS data at ©24.
4. What are the commuting patterns of affected workers and residents?
Census data show that in 2011 approximately 83,000 individuals were employed in the
private sector in Montgomery County whose income from their primary jobs was $1,250 per
The wage and employment impact ofminimum wage laws in three cities.
http://wv.w.cepr.net/documcnts!publicationsimin-wage-20 11-03
.QsJJ
15
7
 PDF to HTML - Convert PDF files to HTML files
month or less (approximately full time employment at the minimum wage). Of those, slightly
less than half lived inside the County. Of those commuting in for work, by far the most in­
commuters from anyone jurisdiction commute from Prince George's County (10,730), with
Washington, DC (3,915) a distant second. See ©27.
The same data show that approximately 78,000 individuals living in Montgomery County
are employed in primary jobs with income of $1,250 per month or less. Of those, half live in the
County but are employed outside of the County. Montgomery County residents earning $1,250
per month or less from their primary jobs were more likely to commute to Washington, DC
(9,570) and Prince George's County (6,205) than to any other jurisdictions. See ©25
5. What are the social characteristics of workers in low-income jobs?
The population that is both targeted and affected by a change in the minimum wage is the
"working poor." According to a recent report by Brookings Institute ("The Social Genome
Project at Brookings-Strategies for Assisting Low-Income Families") in 2011 there were 36
million able-bodied adults between the ages of 25 and 55 living in low-income households
(households in the bottom third of the income distribution). Of households in the bottom third,
36% live in poverty while 84% live below 200% of the federal poverty line. See ©31-35.
These "bottom-third" households are much more likely than households in the upper two­
thirds to be black or Hispanic, have much lower levels of educational attainment, and are much
less likely to be married, more likely to have children, and much more likely to be single parents.
Strikingly, 50% of bottom-third households had only 1 earner in the household-in contrast,
78% of top two-thirds households had two earners.
"Bottom-third" households with working heads of households have an average total
household income of$15,607, 88% of which is earned. In contrast, average household income in
bottom third households in which the head of household did not work was $4,888 (93% of which
was non-earned income). Bottom-third households rely more heavily on non-earned income than
do top two-thirds households.
The social and economic characteristics of households in Maryland likely to be affected
by an increase in the minimum wage are analyzed by the Economic Policy Institute (see ©36-39)
and the Employment Policies Institute (see ©40-44) in their respective analyses of the 2013 and
2012 proposals to increase the Federal minimum wage. Relative to other jurisdictions, affected
workers in Maryland tend to be younger, less likely to have children, and more likely to live in
higher income households.
6. Should the County have a higher minimum wage than the State due to the higher cost of
living in the County?
Labor crosses political boundaries-for example, according to the Maryland Department
of Planning, about half of all workers in Montgomery County live outside the County, and about
half of Montgomery County residents work outside of the County. See ©28-29. Consequently,
most indicators of cost of living are calculated at the level of the metropolitan area (or some
similar geography that represents an economic area or market) rather than at the county level (or
some other geography representing a political or legal boundary).
8
 PDF to HTML - Convert PDF files to HTML files
The US Department of Housing and Urban Development calculates Fair Market Rents
(FMRs) annually for 530 metropolitan areas and 2,045 nonmetropolitan county FMR areas.
16
FMRs are used for a number of purposes; for example, FMRs are used to determine payment
amounts for the Housing Choice Voucher program, to determine initial renewal rents for some
expiring project-based Section 8 contracts, and to serve as a rent ceiling in the HOME rental
assistance program. The Fair Market Rent for a two-bedroom unit in Montgomery County,
Prince George's County, Frederick County and Charles County is $1,469. Columbia, Maryland
($1,556) is the only market in which the FMR exceeds Montgomery County. Baltimore area
jurisdictions are lower-Anne Arundel County, Baltimore City, Baltimore County, and Howard
County ($1,252). Examples of FMRs in other counties include Cecil County ($1,135),
Washington County ($968), and Garrett County ($691).
The US Office of Personnel Management locality pay scales set higher pay for the same
work based on the cost of living. Workers stationed in jurisdictions within the Washington DC­
Baltimore-Northern Virginia metro area receive locality pay that is approximately 10% higher
than that of workers in the rest of the United States. A Grade 1 Step 1 employee wage in
Montgomery County is $10.60 per hour (OPM Salary Schedule 2013-DCB), whereas a Grade I
Step I employee wage in Maryland counties outside of the metro area (e.g. Garrett County or
Wicomico County) would be $9.74 (OPM Salary Schedule 20 13-RUS).
The Consumer Price Index is not exactly a cost-of-living calculator, but it does track
changes in prices for consumer goods over time. While it cannot be used to compare prices
among geographies, it can be used to compare price changes among geographies. The CPI for
all urban consumers in the Washington-Baltimore-Northern Virginia area increased by 9.03%
between July 2009 (the last increase in the Federal minimum wage) and September 2013. This
increase outpaced the increase in prices for all urban consumers nationally over this same period
of time (up 8.73% from July 2009 to September 2013).
7. Should the County defer action on this Bill until after the 2014 General Assembly
Session in light of the Governor's public statements that he plans to seek a raise in the
minimum wage in 2014?
The current Maryland minimum wage is the same as the Federal minimum wage of$7.25
per hour. Governor O'Malley recently launched an online petition seeking support to raise the
minimum wage in Maryland and said that his administration plans to introduce a bill to do that in
the next General Assembly session.
17
Governor O'Malley did not reveal the amount of the
proposed increase he will be seeking, but the 2014 General Assembly Session is scheduled to
begin on January 8,2014 and end on April 7, 2014. We will know if the legislation to increase
FMRs are gross rent estimates, and include the shelter rent plus the cost of some tenant-paid utilities (but exclude
telephones, cable or satellite television service, and internet service), FMRs are expressed as the dollar amount
which represents a percentile point within the rent distribution of standard-quality rental housing units-the current
definition expresses the FMR as the 40th percentile rent (the dollar amount below which 40 percent of the standard­
~uality
rental housing units fall).
1
See the November 7,2013 Washington Post article at ©45.
16
9
 PDF to HTML - Convert PDF files to HTML files
the Maryland minimum wage is enacted on or before April 7. Bill 27-13, as introduced, would
not take effect until July 1,2014.
If the General Assembly fails to enact legislation raising the minimum wage,18 then the
Council could act on this Bill without any potential conflicts. If the General Assembly enacts
legislation increasing the minimum wage, then the Council could tailor this Bill to be consistent
with the new State law. For example, if the State minimum is raised to the level of the proposed
County minimum wage, then the Council might want to defer action on the Bill. If the State
increase is less than the proposed County minimum wage, then the Council could decide what
the County minimum wage should
be
with that knowledge. As described above, economists
disagree on the possible effect of a County-wide minimum wage that is higher than surrounding
jurisdictions on unemployment and County businesses.
It
is impossible to estimate the potential
effect without knowing what the spread will be. Establishing a County minimum wage is a
significant step that may have significant positive and negative consequences for the County's
economy. The largest unknown variable in this matrix is what the State minimum wage will be
in 2014. We have the opportunity to wait for this variable to become known before the Bill
would take effect. Although the General Assembly session ends on April 7, we may know if the
State minimum will be increased and if so, by how much, earlier if the House and Senate enact
the Bill sooner.
Although the General Assembly has not preempted the County from enacting a higher
County minimum wage, the General Assembly has the authority to enact a public general law
that expressly prohibits the counties from enacting a higher minimum wage. Action by the
County now may make it more difficult, but not impossible, for the State to preempt the counties
in the next session of the General Assembly as they consider the Governor's proposal to raise the
State minimum wage.
Bill 27-13, as introduced, would establish a County minimum wage independent of the
State minimum. Enactment of the Bill in this form now would leave the spread between the
State and County minimum unknown. However, if the Council believes that the minimum
should be higher in Montgomery County than the rest of the State due to the higher cost of living
in the County, the Council may want to consider amending Bill 27-13 to establish a County
minimum wage at a specific dollar amount above the State minimum.
'9
An example of this
approach would be to set a County minimum wage rate at
$1
more than the State minimum.
If the Committee decides to establish a County minimum wage at a specific dollar
amount above the State minimum, there is little reason to wait for the State to act because the
spread would remain constant. However, if the Committee wants to establish a County
minimum wage independent of the State minimum, the Committee may want to defer action on
Bill 27-13 until we know what the State minimum wage will be in 2014.
A Bill that would have raised the State minimum wage to $10 per hour failed in the 2013 Session.
19
The Executive's position on Bill 27-13 is that the County minimum wage should be higher than the State and
urged the Council to enact a minimum wage bill without waiting to see if the State acts in the next 2014 session.
The Executive did not recommend how much higher he would set the County minimum wage. See ©46-48 for the
exchange of letters between the Executive and Councilmember Berliner.
18
10
 PDF to HTML - Convert PDF files to HTML files
8. Would the County Minimum Wage apply in municipalities?
As with most County laws, the County minimum wage would not automatically be
applicable in certain municipalities. Md. Local Gov't Code, §4-111 provides that a municipality
can exempt itself from certain types of County laws. See ©49-51. The County Attorney's Office
created a chart that lists the Chapters of the County Code from which each municipality has
exempted itself?O According to the most recent chart, there are 6 municipalities in which the Bill
would
not
apply unless they expressly opt in: Barnesville, Chevy Chase Village, Glen Echo,
Laytonsville, and Poolesville?1 The Bill would apply in all of the other municipalities unless
they expressly opt out, including Rockville and Gaithersburg. We would note that with the
possible exception of Poolesville, there are few large employers located in these municipalities.
The State law does permit the County to enact a law that applies in each municipality
under a specific emergency procedure with 6 votes. However, the Council would have to hold a
new public hearing after giving each municipality 30 days actual notice, and make a legislative
finding that "there will be a significant adverse impact on the public health, safety, or welfare
affecting residents of the County in unincorporated areas if the law does not apply in all
municipalities." This finding by the Council would be subject to judicial review in the Circuit
Court. Furthermore, the County Code contains the following provision in §1-203:
(t)
Emergency override authority.
The County declares that it will not
exercise the authority granted to it by the General Assembly under section
2B(b)(3), article 23A, Annotated Code of Maryland 1957, as amended.
22
Therefore, in order for the Bill to apply in all municipalities, the Council would either need to
amend § 1-203 of the County Code or add a section to Bill 27-13 expressly voiding this provision
for this Bill only to use the emergency override authority granted under State law.
9. How would a "regional minimum wage," enacted in concert with Prince George's
County and the District of Columbia, work?
Bill 27-13 was introduced on October 1, 2013; on October 9, members of the
Montgomery and Prince George's County Councils and the District of Columbia Council held a
joint news conference in which they announced a plan to create a "regional minimum wage." See
©54-55. Each Council is considering legislation which would ultimately establish a minimum
wage of $11.50 per hour within the respective jurisdiction. Presumably, this regional approach
would avoid putting businesses in any of the jurisdictions at a competitive disadvantage against
the others.
It
is one thing to propose legislation in all of the jurisdictions that would result in an
$11.50 per hour "regional minimum wage." However, given the different legislative processes
and political realities in the three jurisdictions, it may prove challenging to enact such consistent
legislation in all three jurisdictions.
20
The Chart can be found at: http://www.montgomervcountvmd.gov/catlservices/index.html
Although the County Attorney's chart indicates that Takoma Park exempted itself from Chapter 27, the Takoma
Park City Attorney told Council staff that the City agreed to be bound by Chapter 27 of the County Code and
therefore this minimum wage Bill. See ©52-53, 11-19-13 email from Jennifer Young.
22
This code section was recently recodified as Md. Local Gov't Code §4-111.
21
11
 PDF to HTML - Convert PDF files to HTML files
In Prince George's County, CB-94-2013 was presented on October 1 and heard in the
County's Public Safety and Fiscal Management Committee on October 17. Two relatively minor
amendments were made to the Bill in committee, and the revised Bill was introduced on October
22. A public hearing on the Bill was held on November 19, and the County Council deferred
action on the Bill until December 3.
It
should be noted that the Prince George's County Charter
provides that "any bill not enacted by the last day of November of each year shall be considered
to have failed." In light of this provision, the County Council may reconvene and act on the Bill
prior to December 1. If they do not act by then, the Bill would have to be reintroduced as a new
bill in 2014.
The District of Columbia Council is considering three separate bills that would increase
the minimum wage:
1)
B20-438, the "Minimum Wage and Accrued Sick and Safe Leave Amendment
Act of 2013," which would raise the city minimum wage to $10.50 per hour over
3 years and does not include a provision for future increases;
B20-459, the "Minimum Wage Amendment Act of 2013," which would raise the
city minimum wage to $12.50 per hour over 4 years beginning in 2015, provide
for annual increases indexed to the Consumer Price Index for All Urban
Consumers (CPI-U) thereafter, and raise the "tipped" minimum wage in the
District to 70% of the regular minimum wage; and
B20-460, the "Living Wage for All Act of 2013," which would raise the city
minimum wage to $10.25 per hour over 2 years, index future increases to the CPI­
U thereafter, and increase the standard deduction for taxpayers in the District.
2)
3)
A public hearing on all 3 bills was held on October 28, and there is some expectation of a
committee mark-up combining the proposals into a bill implementing the "regional minimum
wage" being championed by Council Chair Mendelson. The Washington Post reported
yesterday that Councilmember Vincent Orange, Chair of the Committee on Business, Consumer
and Regulatory Affairs, expects his Committee to produce a single marked up Bill with the
minimum wage rising to $11.50 per hour at a worksession on Monday, November 25. See ©56­
57.
The different status of minimum wage legislation pending before our regional partners
illustrates the complexity of coordinated legislative action across jurisdictions to implement a
consistent policy. Even if there are increases in the minimum wage in Prince George's County
and the District of Columbia, it is not certain that they will be consistent with any increase
enacted in Montgomery County.
10. What employees would be excluded from the County minimum wage?
The County minimum wage in Bill 27-13 would not apply to an employee who is exempt
from the minimum wage requirements of the State or Federal Act. Md. Labor and Employment
Code, Sec. 3-403 lists the general exclusions from the State Act, which would also be excluded
from the County minimum wage. See Maryland DLLR Wage
&
Hour Fact Sheet at ©58. There
are also certain exemptions from the Federal Act, beyond those in the State Act.
12
 PDF to HTML - Convert PDF files to HTML files
Two notable State law exclusions relate to the age of, and number of hours worked by,
the employee. Specifically, Md. Labor
&
Employment Code Ann. §3-403 excludes an employee
who is under the age of 16 years and is employed no more than 20 hours per week, and an
employee who is at least 62 years of age and is employed no more than 25 hours per week. Sec.
3-403 also excludes employees of certain small businesses. These employees must employed in
a cafe, drive-in, drugstore, restaurant, tavern, or other similar establishment that sells food and
drink for consumption on the premises and has an annual gross income of $ 250,000 or less.
The Federal Act exemption most likely to be implicated is the exclusion of employees of
certain seasonal and recreational establishments from the Federal minimum wage requirements.
See ©59-60. While employees of these establishments would not be subject to the County
minimum wage, they would be subject to the State minimum wage, as there is no corresponding
State Act exemption.
11. Should a County minimum wage exclude tipped employees?
Bill 27-13 excludes tipped employees. This is an area where the State and Federal laws
differ slightly. Md. Labor and Employment Code Ann, §3-419 defines a tipped employee as an
employee who:
(2)
is engaged in an occupation in which the employee customarily
and regularly receives more than $30 each month in tips;
(ii)
has been informed by the employer about the provisions of this
section; and
(iii)
has kept all ofthe tips that the employee received.
Notwithstanding paragraph
(l)(iii)
of this subsection, this section does
not prohibit the pooling oftips.
(i)
The State law requires an employer to pay a tipped employee 50% of the minimum wage, or
$3.63 per hour. If the employee does not receive enough tips to make up the difference, the
employer must pay the employee the difference. The Federal law works similarly, but the base
pay for a tipped employee is only $2.13 per hour.
Enforcement of the minimum wage for a tipped employee is more complicated because
an investigator would have to determine how much the employee actually received in tips to
determine if the employer did not meet its obligation to make up the difference. Although
several speakers at the public hearing asked the Council to include tipped employees in the law,
we do not have any statistics on the number of tipped employees in the County who are currently
earning close to $7.25 per hour with tips. Establishing a County minimum wage is a significant
step without including tipped employees. If the Committee wants to include tipped employees in
the Bill, the Committee would need to decide whether an employee should remain at a base of
50% of the State minimum with an employer obligation to make up the difference up to the
County minimum or raise both the base and the ultimate minimum for base plus tips.
13
 PDF to HTML - Convert PDF files to HTML files
12. Should a County minimum wage exclude employees eligible for the opportunity or
youth minimum wage under the State Act or the Federal Act?
Bill
27~
13 would exempt employees eligible for the youth minimum wage under the State
Act or the Federal Act. The Federal Act pelTIlits an employer to pay a worker who is under 20
years old $4.25 per hour for the first 90 days of the worker's employment with that employer.
The pay rate must be increased to the minimum wage required for other workers after the earlier
of90 calendar days or the worker's 20
th
birthday. See the Department of Labor Youth Minimum
Wage Factsheet at
©61~62.
The State Act includes the same youth minimum wage. This
Federal exception is designed to encourage an employer to hire unskilled youths for up to 90
calendar days at a lower wage to give the worker time to learn the job before the full minimum
wage is applied. The County minimum wage would apply on the earlier of the worker's 91
s1
day
of employment or the worker's 20
th
birthday.
13. Should the County minimum wage provide a credit for the cost of health insurance
provided to employees?
Bill 27-13 provides an employer with a credit for the per-employee hourly cost of the
employer's share of the health insurance premium for any employer-provided health insurance.
The purpose of this provision is to discourage an employer who is currently providing health
insurance from dropping it in order to pay a higher minimum wage. However, the Federal
Patient Protection and Affordable Care Act is changing this equation. By 2015, any employer
with more than 50 employees will have to provide affordable health insurance to all of its full­
time employees. Beginning in 2014, Maryland residents will be able to purchase health
insurance without exclusions for pre-existing conditions in the new Maryland health care
exchange.
Low-wage workers are eligible for tax subsidies to reduce the cost of health insurance on
the exchange. Therefore, a credit for health insurance provided by Federal mandate will reduce
the County minimum wage that must be paid by an employer with more than 50 employees. A
minimum wage worker who is employed in a small company with less than 50 employees and
who can purchase subsidized insurance on the Maryland Health Care Exchange might be better
off earning the full County minimum wage than having it reduced by the employer's cost of
providing health insurance.
For example, an individual earning $8.25 per hour who works 2000 hours in a year has an
annual income of $16,500. Using the current online calculator for the Kaiser Family Foundation,
this individual would be eligible for a subsidy of $1402 of the total $2000 annual premium,
leaving an annual health care premium of $598 or 3.63% of income?3 Therefore, this
hypothetical employee would have more disposable income purchasing insurance on the
exchange rather than having the minimum wage reduced by the employer's cost of the insurance.
Council staff recommendation: delete the credit for employer provided health care.
23
The Kaiser calculator can be found at: http://kff.ondinteractive/subsidv-calculator
14
 PDF to HTML - Convert PDF files to HTML files
14. Should the County minimum wage apply to teenagers?
Testimony was offered at the public hearing expressing concern that raising the minimum
wage would lead to an increase in teen unemployment. As discussed above, there is evidence
both supporting and refuting the proposition that an increase in the minimum wage will result in
an increase in teen unemployment. Also, as has been noted, there are existing State law
provisions which would limit the applicability of the County minimum wage by age and tenure.
The State Act does not apply to an individual who is under the age of 16 years and is employed
no more than 20 hours in a week.24 Also, as discussed above, both the State and Federal Acts
provide for the payment of the opportunity wage, or youth minimum wage, to workers under 20
years old for their first 90 days of employment with a particular employer.
Smokey Glen Farm, one of the largest single-unit youth employers in the County,
recently submitted an email indicating that the increased minimum wage would pose a particular
hardship due to its large youth workforce. According to the email, prices would rise by 5% to
8% to cover the additional expense associated with the wage increase, and that this would
prevent the business from being competitive with other facilities in the region that are not subject
to the higher minimum wage. A copy of the email from Smokey Glen Farm is at ©110-112.
In Prince George's County, CB-94-2013 was amended to exempt from the County's
minimum wage an employee who is "under the age of 18 years and is employed no more than
twenty (20) hours in a week." The Committee may wish to consider whether to go beyond the
existing State law exclusions in order to limit any negative impact on teen employment as a
result of an increase in the minimum wage. Exempting part-time workers aged 18 (or 21) years
of age and younger from a County minimum wage requirement may prevent a possible increase
in teen unemployment, and may lessen the impact of the increase on businesses that rely largely
on part-time, teenage employees. However, it may also have the effect of incentivizing
employers to increase reliance on teen labor as a means of paying lower wages at the expense of
workers who are relying on minimum wage jobs as their primary source of income.
15. How should the County minimum wage be enforced?
Bill
27-13 would authorize a person to file a County minimum wage complaint with the
Office of Human Rights. The complaint would be handled in the same manner as a complaint
alleging a violation of the County employment discrimination laws. The Director has authority
to issue subpoenas and investigate the complaint. If the Director finds reasonable cause to
believe a violation occurred, the Director must try to settle the case. If unable to settle the case,
the Director must certify the complaint to the Human Rights Commission, which must appoint a
case review board to consider and decide the complaint. If the Director does not find reasonable
cause to believe a violation has occurred, the complainant may appeal the Director's decision to
the Commission. An adjudicatory hearing may be conducted by the Commission case review
board or a hearing examiner.
Section 3-403 of the Labor and Employment Article of the Maryland Code contains a list of "general exclusions"
from the State Wage and Hour law, including an individual under age 16 who is employed no more than 20 hours in
a week. Bill 27-13 specifically exempts an employee who is exempt from the minimum wage requirements of the
State or Federal Act.
24
15
 PDF to HTML - Convert PDF files to HTML files
The Commission has the authority to award compensatory damages to the complainant,
including reasonable attorney's fees. The Commission also has the authority to order the
defendant employer to pay a civil fine to the County of up to $500 for each violation. The
Commission's final decision is subject to judicial review on the record by the Circuit Court.
The State minimum wage law is enforced by the Wage and Hour Division of the
Maryland Department of Labor, Licensing, and Regulation (DLLR). Council staff spoke with
the Assistant Attorney General responsible for advising and representing DLLR about
enforcement. The State has reduced its enforcement staff from a high of 40 employment
standards investigators to a current complement of 5 investigators covering the entire State.
Each investigator is responsible for complaints alleging a violation of the minimum wage law,
the overtime law, and the unpaid wages law. Unpaid wages make up most of the complaints.
The State has been able to reduce its staff, in part, because the State minimum wage and
overtime provisions are virtually identical to the Federal Fair Labor Standards Act. DLLR
investigators often refer complainants to the US Department of Labor. For comparison, the
OMB Fiscal Impact Statement estimates that the Office of Human Rights would need to hire 3
additional investigators to handle enforcement of the County minimum wage at an annual cost of
$346,980. See ©14. News reports indicate that the City of San Francisco has adopted a $3
million budget for enforcement of their city minimum wage. See ©64.
Although we do not have a formal opinion, the Assistant Attorney General believes that
the State law would have to be amended to authorize DLLR to enforce a County minimum wage
that was higher than the State minimum. Therefore, if the Committee believes State enforcement
would be preferable, the County should seek State legislation authorizing it. Absent State
legislation, Bill 27-13 could be amended to authorize the Executive to enter into an agreement
with DLLR to enforce the County minimum wage.
Bill 27-13 does not contain an express prohibition on retaliation against a person for
filing or assisting on a complaint alleging a minimum wage violation. This is a standard
provision in most anti-discrimination laws, and Council staff believes it should be added to Bill
27-13. If the Committee agrees, this could be accomplished by adding the following new
language after line 119 of the Bill:
Retaliation vrohibited
A person must not:
retaliate against any person for:
!Al
lawfully opposing any violation of this Article: or
!.ID
filing a complaint.!t::stifying. assisting. or participating in any
manner in an investigation, proceeding, or hearing under this
Article: or
obstruct or prevent enforcement or compliance with this Article.
16. How would a County
minimum
wage affect a worker's eligibility for social services
programs?
Each social services program has its own maximum income eligibility levels. If a low­
wage worker receives a higher wage due to a new County minimum wage, that person's
eligibility for such programs may change. Although there are too many variables to predict how
16
 PDF to HTML - Convert PDF files to HTML files
many County residents would lose eligibility due to a higher County minimum wage, we can
make some general observations. The County Department of Health and Human Services (HHS)
produced a spreadsheet showing the maximum income levels for the different social services
programs at ©70-72.
For example, if a worker earns the current minimum wage of $7.25 per hour for 2000
hours in a year (roughly full-time work), the worker would have an annual gross income of
$14,500. If the worker receives a raise to $8.25 per hour, the annual gross income climbs to
$16,500. A raise to $11.50 per hour brings the annual gross income up to $23,000. Since the
maximum income for Medicaid eligibility for an individual is $15,856, a raise to $8.25 makes
the worker ineligible. However, if the worker has 1 child, the worker would remain eligible for
Medicaid at $8.25 per hour, but still would lose eligibility at $11.50 per hour. In contrast, the
maximum income to be eligible for the Montgomery Cares Program is $28,725 for an individual.
The same worker would remain eligible for Montgomery Cares even if paid $11.50 per hour.
The other variables include number of hours worked and other family income.
It
is logical to conclude that a significantly higher County minimum wage would reduce
the number of residents eligible for different social services programs. However, Council staff
did not find any studies that could be used to predict the effect of a County minimum wage on
the number of residents eligible for these programs.
Academic labor economists do not agree on whether an increase in the minimum wage
would reduce poverty. Neumark and Wascher argue that the movement into poverty by
households negatively affected by increases in the minimum wage (for example, by lost
employment or by reduced hours) more than offsets movement out of poverty by households
positively affected by increases in the minimum wage. In their view, increasing the minimum
wage redistributes wages among poor households rather than redistributing wages from wealthier
to poorer households. Other studies, for example Hirsch, Kaufman, and Zalenska have reached
the opposite conclusion. In their study of the impact of the 2007-2009 increases in the Federal
minimum wage on restaurants in Georgia and Alabama, they found no statistically significant
impact on employment or hours and concluded, on the basis of interviews with restaurant
managers, that reductions in employment and/or hours can be costly or counter-productive, and
are typically choices of last resort.
17. What are the reasonable alternative methods to determine the amount of the County
minimum wage?
Bill
27-13 would establish a minimum dollar amount that must be paid to an employee
working in the County independent of the State or Federal Acts. At the end of the 3-year phase­
in period, the County minimum wage would be $12.00 per hour (or $11.50 per hour if
Councilmember Eirich's amendment is approved). The County minimum wage would then be
indexed to any increases in the CPI-U. However, an alternative would be to amend the
Bill
to
require employers in the County to pay workers at least the greater of the State or Federal
minimum plus an additional dollar amount
For example, if the
Bill
was amended to set the County minimum at the State or Federal
minimum plus $1, the current minimum would be $8.25 per hour. If the General Assembly
raises the minimum in
its
2014 session
as
the Governor proposes, the County minimum wage
17
 PDF to HTML - Convert PDF files to HTML files
would then be $1 above the new State minimum. Under this alternative, the spread between the
County minimum wage and the rest of the State would remain constant and be known.
It
would
also guarantee that the County minimum wage would be higher than the State minimum to
compensate for the higher cost of living in the County. The disadvantage of this alternative is
that the Council would have less control over the actual amount of the County minimum wage.
A chart showing the different minimum wages in each State is at ©73-76.
18. Should the County Minimum Wage be indexed to the CPI-U?
Bill 27-13 provides that, beginning in 2017, the County minimum wage is to be adjusted
annually by the annual percentage increase, if any, in the CPI-U.z
5
Providing for an annual
adjustment to the minimum wage would largely depoliticize the regular increases, and would
ensure a measure of predictability to employers. However, annual increases in the minimum
wage could result in wage compression being a yearly problem for employers, as employers
would be required to increase wages for workers making the minimum wage without regard to
whether the business could provide corresponding raises up the wage scale. In addition, if the
County indexes its minimum wage to inflation and the State does not, the spread between the
County minimum wage and the State minimum may become very large.
Indexing to inflation does not, however, result in higher wages each indexed year. Since
1990, the real value of the minimum wage has been as low as $6.61 (in 2007) and as high as
$7.90 (in 2009). See ©77-79, Congressional Research Service, 2013
"Inflation and the Real
lvfinimum Wage: A Fact Sheet."
Similarly, indexing the minimum wage to inflation does not
mean that hourly wages at the minimum wage will keep up with total economic productivity, the
earnings of the top earners, or the average or median wages of all non-supervisory employees.
26
For a thorough explanation of the issue, please see attached statement by Adrindrajit
Dube, Ph.D. to the U.S. Senate Committee on Health, Education, Labor and Pensions for a
hearing on indexing the minimum wage. See ©80-1 00.
19. Should a County minimum wage apply to County employees?
Bill 27-13 does not apply to Federal, State, County, or municipal employees. The County
does not have authority to prescribe a minimum wage for Federal, State, or municipal
employees. The County may apply the County minimum wage to County employees. The
County's Wage Requirements Law requires a County contractor providing certain services to the
County to pay its employees working on the County contract a living wage, currently $13.95 per
hour. According to Human Resources, no County merit system employee is paid less than the
In 2014, eleven states will index the minimum wage. See
©73-76
25
For example, the Economic Policy Institute compared the change in the minimum wage since 1968 (the year in
which the real value of the minimum wage was the highest in the history of the minimum wage) to changes in other
economic indicators- if the minimum wage had increased at the same rate as economic productivity it would be
$18.72; if the minimum wage had increased at the same rate as the wages of the top 1% ofeamers it would be
$28.34; if the minimum wage had increased at the same rate as real average wages since 1968 the minimum wage
would be $10.46.
26
18
 PDF to HTML - Convert PDF files to HTML files
$13.95 living wage. However, there are 2,227 temporary (seasonal, substitute, or intermittent)
employees earning less than the County living wage, located in the following departments:
Recreation
Libraries
HHS
Liquor Control
DOCR
CEC
County Attorney
Elections
2030
119
23
33
5
10
5
2
We understand that some of these temporary employees earn less than the proposed
County minimum wage of $11.50 per hour. A County minimum wage imposed upon private
employers in the County should also apply to temporary employees hired by the County.
Council staff recommendation: amend the Bill to include County employees.
20. Would the Bill apply to workers who work in the County for an employer located
outside of the County or who work outside the County for an employer located in the
County?
The County Attorney explained in the Bill review memorandum that the law must apply
only to work performed in the County by an employer who is located in the County in order to
be an authorized local law. See ©9. The dual requirement that the employer
be
located in the
County and the work be performed in the County would apply to any municipality that has
exempted itself from this law as well as other counties inside and outside of Maryland. Council
staff agrees with this analysis. Council staff recommendation: clarifY this issue by amending
lines 92-94 of the Bill as follows:
ill
County minimum wage.
least the greater of:
Except as provided in Subsection {Q1 an employer must
County at
lli!Y
wages to each emplovee [[working]] for work performed in
21. What are the proposed amendments?
Councilmember EIrich intends to introduce an amendment to reduce the minimum wage
in 2016 from $12.00 per hour to $11.50 per hour to be consistent with the anticipated regional
minimum wage that may be adopted by Prince George's County and the District of Columbia.
See ©1Ol.
Councilmember Riemer intends to introduce an amendment that would set the County
minimum wage in 2016 at the greater of $10.75 or $1 over the State minimum and remove the
index to the CPI-U. Councilmember Riemer's amendment would make similar changes to the
County minimum wage during the phase-in period. See ©102-106. Councilmember Riemer's
memo describing the reasons for his amendment is at
©
107.
19
 PDF to HTML - Convert PDF files to HTML files
This packet contains:
Bill
27-13
Legislative Request Report
County Attorney Opinion - October 11,2013
Fiscal and Economic Impact Statement
Washington Post
article, 2-14-13
EMSI analysis
EMSI data
Journey to Work Commutation
Brookings
-
Strategies for Assisting Low Income Families
Economic Policy Institute
Employment Policies Institute
Washington Post
Article, 11-7-13
Councilmember Berliner Letter, 11-12-13
County Executive Leggett Letter
Md. Local Gov't Code, §4-111
Jennifer Young email
Joint regional news release
Washington Post
article, 11-18-13
DLLR Wage and Hour Fact sheet
Fact Sheet: Federal Act - seasonal and recreational
Fact Sheet: Youth Minimum Wage
City of San Francisco press release, 5 -1-13
HHS spreadsheet of social services programs
State minimum wage chart
Fact sheet: The Real Minimum Wage
Statement from Arindrajit Dube, Ph.D.
Councilmember EIrich amendment
Councilmember Riemer amendment
Councilmember Riemer memo, 11-19-13
Smokey Glen Farm email
Circle
#
1
8
9
13
20
22
24
29
31
36
40
45
46
48
49
52
54
56
58
59
61
64
70
73
77
80
101
102
107
110
F:\LAW\BILLS\1J27 Human Rights-Minimum Wage - Dollar Amount\HHS Memo 3-2(11-18-13).Doc
20
 PDF to HTML - Convert PDF files to HTML files
Bill No.
27-13
Concerning: Human Rights and Civil
Liberties - County Minimum Wage ­
Dollar Amount
Revised: September 17, 2013 Draft No.
§
Introduced:
October 1, 2013
Expires:
April 1, 2015
Enacted: _ _ _ _ _ _ _ _ __
Executive: _-:-:--:---:-:--:-:-_ _ __
Effective:
July 1, 2014
Sunset Date: --!..!.No:::,:n.:.::e:...-_ _ _ _ __
Ch. _ _, Laws of Mont. Co. _ __
COUNTY COUNCIL
FOR MONTGOMERY COUNTY, MARYLAND
By: Councilmembers Elrich, Ervin and Council President Navarro
AN
ACT to:
(1)
(2)
(3)
require certain employers in the County to pay a minimum wage to certain
employees working in the County;
provide a credit for certain employers who provide health insurance to employees
working in the County;
provide enforcement by the Office of Human Rights and the Human Rights
Commission;
authorize the Human Rights Commission to award certain relief; and
generally regulate the minimum wage paid to an employee working in the County
for certain employers.
(4)
(5)
By amending
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Sections 27-7 and 27-8
By adding
Montgomery County Code
Chapter 27, Human Rights and Civil Liberties
Article XI, Minimum Wage
Boldface
Underlining
[Single boldface brackets]
Double underlining
[[Double boldface brackets]]
* * *
Heading or defined term.
Added to existing law by original bill.
Deletedjrom existing law by original bill.
Added by amendment.
Deletedjrom existing law or the bill by amendment.
EXisting law unaffocted by bill.
The County Council for Montgomery County, Maryland approves the following Act:
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 27-13
1
Sec. 1.
Sections 27-7 and 27-8 are amended and Chapter 27, Article
2
3
4
XI is added as follows:
27-7. Administration and enforcement.
(a)
Filing complaints.
Any person subjected to a discriminatory act or
5
practice in violation of this
Article~
or any group or person seeking to
/
6
7
enforce this Article or [Article] Articles X or XI, may file with the
Director a written complaint, sworn to or affinned under the penalties of
perjury, that must state:
(1)
(2)
the particulars of the alleged violation;
the name and address of the person alleged to have committed the
violation; and
(3)
any other infonnation required by law or regulation.
8
9
10
11
12
13
*
(f)
(1)
*
*
14
15
16
17
18
19
20
Initial determination, dismissal before hearing.
The Director must detennine, based on the investigation, whether
reasonable grounds exist to believe that a violation of this Article
or [Article] Articles X or XI occurred and promptly send the
detennination to the complainant and the respondent.
(2)
If the Director detennines that there are no reasonable grounds to
believe a violation occurred, and the complainant appeals the
detennination to the Commission within 30 days after the
Director sends the detennination to the complainant, the Director
promptly must certify the complaint to the Commission. The
Commission must appoint a case review board to consider the
appeal. The board may hear oral argument and must:
(A)
(B)
dismiss the complaint without a hearing;
order the Director to investigate further; or
21
22
23
24
25
26
27
&
F:ILAWIBILLSI1327 Human Rights-Minimum Wage - Dollar Amount\BiIlS.Doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No.
27-13
28
(C)
set the matter for a hearing by a hearing examiner or the
board itself, and consider and decide the complaint in the
same manner as if the Director had found reasonable
grounds to believe that a violation of this Article or
[Article] Articles X or XI occurred.
29
30
31
32
33
34
35
(3)
If the Director determines that there are reasonable grounds to
believe a violation occurred, the Director must attempt to
conciliate the matter under subsection (g).
36
37
38
*
27-8. Penalties and relief.
*
*
(a)
Damages and other relieffor complainant.
After finding a violation
39
40
41
42
of this Article or [Article] Articles X or XI, the case review board may
order the payment of damages (other than punitive damages) and any
other relief that the law and the facts warrant, such as:
*
(2)
*
*
43
44
45
46
equitable relief to prevent the discrimination or the violation of
[Article] Articles X or XI and otherwise effectuate the purposes
ofthis Chapter;
*
(4)
*
*
47
48
49
any other relief that furthers the purposes of this Article or
[Article] Articles X or XI or is necessary to eliminate the effects
of any discrimination prohibited under this Article.
50
51
*
ARTICLE XI.
27-67.
Findings and Definitions.
*
*
County Minimum Wage.
52
53
.w
Findings.
F:\LAW\BILLS\1327 Human Righl5-Minimum Wage - Dollar Amount\Bili 5.Doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 27-13
54
55
56
57
ill
Many persons employed in the County are paid wages which are
insufficient to sustain minimum standards of living in the County.
ill
ill
Minimum standards of living in the County are higher than the
minimum standards of living in many other areas of the State.
Minimum wage standards in the County are necessary to:
58
59
®
promote the health and welfare of County residents;
safeguard employers and employees against unfair
competition;
60
61
62
.an
{Q
increase the stability of industry in the County;
increase the buying power of employees in the County;
and
63
@
64
65
66
67
aD
decrease the need for the County to spend public money
for the relief of employees who also live in the County.
®
Definitions.
As used in this Article:
Consumer Price Index
means the Consumer Price Index for All Urban
68
69
70
71
72
Consumers: All items in Washington-Baltimore, DC-MD-VA-WV
(CMSA), as published
Qy
the United States Department of Labor,
Bureau of Labor Statistics, or
f!
successor index.
Director
means the Executive Director of the Office of Human Rights
73
and includes the Executive Director's designee.
Employ
means to engage
f!
person to work for compensation.
Employee
means any person permitted or instructed to work or be
74
75
76
77
78
present
Qy
an employer in the County and who
an employee subject
to the minimum wage requirements of the Federal Act or the State Act.
Employer
means any person, individual, proprietorship, partnership,
79
joint venture, corporation, limited liability company, trust, association,
F:ILAWIBILLSI1327 Human Rights-Minimum Wage Dollar AmountlBiIlS.Doc
 PDF to HTML - Convert PDF files to HTML files
BILL
No. 27-13
80
81
82
83
84
85
86
87
88
89
90
91
or other entity that employs
.f.
or more persons
the County. Employer
does not include the United States, any State, or any local government.
Federal Act
means the federal Fair Labor Standards Act of 1938, as
amended.
Health insurance
means insurance coverage that
part of an employer
benefit package that
Pill
for medical expenses incurred
Qy
an employee
and an employee's family either
Qy
reimbursing the employee or
Qy
paying the care provider directly.
State Act
means the Maryland Wage and Hour
Wage
means all compensation that
employment.
27-68.
Minimum Wage Required.
as amended.
due to an employee for
92
93
94
95
96
ill
County minimum wage.
employer must
~
Except as provided in Subsection
@1
an
wages to each employee working in the County at
least the greater of:
ill
ill
ill
the minimum wage required for that employee under the Federal
.:::..=
Act
97
98
99
the minimum wage required for that employee under the State
Act; or
the County minimum wage of $12 per hour, as adjusted under
Subsection !.Q1less any health insurance credit under Subsection
(li
100
101
102
103
104
105
106
®
Annual adjustment.
The Chief Administrative Officer must adjust the
minimum wage rate required under Subsection (a)(3), effective July
2017, and July
L
1
of each subsequent year,
Qy
the annual average
increase, if any, in the Consumer Price Index for the previous calendar
year. The Chief Administrative Officer must calculate the adjustment to
(D
F:\LAw\BILLS\1321 Human Rights-Minimum Wage· Dollar Amount\Bill 5.00c
 PDF to HTML - Convert PDF files to HTML files
BILL No. 27-13
107
108
the nearest multiple of
~
cents, and must publish the amount of this
adjustment not later than March
1
of each year.
109
110
111
112
113
W
Health insurance credit.
An
employer who provides health insurance to
any employee who works in the County may reduce the County
minimum wage payable under paragraph (a)(3) to any employee who is
eligible to receive health insurance
Qy
all or part of the per-employee
hourly cost ofthe employer's share of the premium for that insurance.
@
114
115
Exclusions.
The County minimum wage does not
~
to an employee
who:
116
11 7
118
119
120
ill
ill
ill
27-69.
is exempt from the minimum wage requirements of the State or
Federal Act;
is
~
tipped employee under the State Act; or
is subject to an opportunity wage under the State or Federal Act.
Enforcement.
121
122
123
A covered employee who was paid
~
wage rate less than the County minimum
wage in violation of this Article may file
~
complaint with the Director under Section
27-7.
Sec. 2.
Transition.
In
124
125
Notwithstanding Section 27-68(a)(3), as added
minimum wage must be:
(a)
Section 1, the County
126
127
effective July 1, 2014, $7.25 per hour for an employee during the
employee's first 90 days of employment and $8.25 per hour beginning
on the employee's 91
st
day of employment;
128
129
130
131
132
(b)
effective July 1, 2015, $8.25 per hour for an employee during the
employee's first 90 days of employment and $9.75 per hour beginning
on the employee's 91
st
day of employment; and
F:\LAW\B1LLS\ 1327 Human Rights-Minimum Wage - Dollar Amount\Bill 5.Doc
 PDF to HTML - Convert PDF files to HTML files
BILL No. 27-13
133
134
135
136
(c)
effective July 1, 2016, $9.75 per hour for an employee during the
employee's first 90 days of employment and $12.00 per hour beginning
on the employee's 91
st
day of employment.
Sec. 3.
Effective Date.
137
This Act takes effect on July 1,2014.
Approved:
138
139
Nancy Navarro, President, County Council
Date
140
Approved:
141
Isiah Leggett, County Executive
Date
142
This is a correct copy ofCouncil action.
143
Linda M. Lauer, Clerk of the Council
Date
F:\LA\V\BILLS\1327 Human Rights-Minimum Wage - Dollar Amount\Bill 5,1)oc
 PDF to HTML - Convert PDF files to HTML files
LEGISLATIVE REQUEST REPORT
Bill 27-13
Human Rights and Civil Liberties
-
County Minimum Wage
-
Dollar Amount
DESCRIPTION:
The Bill would establish a County minimum wage that must be paid
to certain employees working in the County for a private sector
employer. The Bill would also encourage an employer to provide
health insurance to its employees by providing a credit against the
County minimum wage based upon the cost per employee for the
insurance. If the State or federal minimum wage is greater than the
County minimum wage, an employer would still need to satisfy the
State or federal law.
The State and federal minimum wage of $7. 25lhour is insufficient to
support a full-time worker in the County.
To maintain a reasonable living wage for workers in the County
when the State and federal minimum wage is insufficient.
Human Rights Commission
To be requested.
To be requested.
To be requested.
To be researched.
Robert H. Drummer, Senior Legislative Attorney, 240-777-7895
To be researched.
PROBLEM:
GOALS AND
OBJECTIVES:
COORDINATION:
FISCAL IMPACT:
ECONOMIC
IMPACT:
EVALUATION:
EXPERIENCE
ELSEWHERE:
SOURCE OF
INFORMATION:
APPLICATION
WITHIN
MUNICIPALITIES:
PENALTIES:
Class A civil citation and equitable relief.
F:\LAW\BILLS\1327 Human Rights-Minimum Wage - Dollar Amount\LEGISLATlVE REQUEST REPORT. Doc
f:\law\bills\ 1327 human rights-minimum wage - dollar amount\legislative rec
 PDF to HTML - Convert PDF files to HTML files
lsiah Leggett
County Executive
Marc P. Hansen
County Attorney
OFFICE OF THE COUNTY ATIORNEY
MEMORANDUM
TO:
FROM:
James Stowe, Director
Office
of
Human
Rights
Erin
J.
Ashbany--[::;'>
Associate County
A~,"r
~~
\.,_",~
-"') r;l
-,
:c
VIA:
DATE:
RE:
Marc P.
Hansen,
County Attorney
October 1 1. 2013
Bill 27-13. Human Rights and Civil Liberties - County Minimum Wage - Dollar
Amount
Bil127·13 amends the County's
Human
Rights law to set a minimum wage paid
to
by
employers to employees for work in the County, and provides for enforcement by the Office of
Human Rights and the Human Rights Commission.
In our view, this law would withstand legal challenge. This law would survive a
chaJlcnge on the issue of preemption by Federal or State minimum wage laws: the Federal
minimum wage law expressly preserves local laws that may set higher rates, and the Court of
Appeals found State law did not preempt a local minimum wage law in
Mayor ofBaltimore v.
Silnick,
254 Md. 303,255 A.2d 376 (1969). The County needs to ensure, however. that its Jaw is
clearly crafted to be a local law, applying only to work performed in the County for employers in
the County.
Both the Federal and State government have minimum wage laws. The Federal
minimum wage rate of$7.25 is set forth in the Fair Labor Standards Act C'FLSA"),' This is also
the minimum wage rate in effect under the State of Maryland's Wage and Hour Law,2 Notably,
bills failed in the Maryland General Assembly's 2013 session that would have raised the State's
I
See
29 U.S.c,
§
206(a)(1) (2012). The $7.25 minimum wage rale has been inetTect since July 2009.
See id.
2
See
generally,
Md. Code
Ann.,
Labor
&
Empt
§§
3-401 - 431 (2008 Rep!. Vol.);
see id.
minimum wage at the greater of$6. 15 or the
minimum wage under
the
fLSA).
*
413(b)( 1)
(setting a
101 Monroe Street, Third Floor,
Rockville,
\1arylaod 20850·2580
(240) 777-/)744 • lTD (240)
777-2545.
PAX (240)
771·6705 •
enn.ashbany@montgomcrycoumymd.gov
(j)
 PDF to HTML - Convert PDF files to HTML files
James Stowe
October] 1,2013
Page 2
minimum wage.
l
The County's proposed law, which sets a minimum wage rate
ofS12.OO
per hour with
increases phased in thereafter, would not be subjectto federal preemption because the FLSA
4
expressly contemplates that State and local jurisdictions may enact higher wage rates.
The question of whether the State's minimum wage law preempts a local minimum wage
law was resolved by the Court of Appeals in
Mayor
0/
Baltimore
v.
Sitnick,
254 Md. 303. 255
A.2d 376 (1969). The Court found that Maryland's minimum wage rate did not preempt
Baltimore's minimum wage law, as Baltimore's law supplemented the State law by setting a
higher rate.
See Sitnick,
254 Md. at 3
J
7.
Baltimore's minimum wage law is stil1 in effect and
en forced.
s
Since the
Sitnick
decision, the Court of Appeals reviewed the issue of implied
preemption
6
by State law on many occasions and developed a detailed analysis. In reviewing
this issue today, the Court would look to "the primary indicia of a legislative purpose to
pre~empt
an entire field of Jaw:' by reviewing "the comprehensiveness with which the General Assembly
has legislated the
field,'·7
Secondarily. the Court would examine:
l) Whether local laws existed prior to enactment of the state laws governing the
same subject matter;
2) Whether the state laws provide for pervasive administrative regulation;
3) Whether the local ordinance regulates an area in which some local control has
traditionally been allowed;
1
See
$,B. 683, H.B. 1204, "Labor and Employment. Maryland Wage and Hour
Law -
Payment of Wages" Gen.
Assem., Reg. Sess. (Md. 2013). The Senate Bill received an unfavorable vote before the Senate Finance Committee
on March 20, 2013 .
..
See
29 U.S.C.
§
218(a) (2Q12)
("No provision
or this Act
or
of any order thereunder shall
Cltcuse
noncompliance
with
any
Federal or
State
law or
municipal ordinance establishing
a
minimum wage higber than
the
minimum
WIIge
established
under this
Act...
n).
See generally
Baltimore,
Md.~
Code
§§
I-I - 6-3 (2010);
id.
§
3-1 (setting minimum wage for "every employer
operating
and doing business
in Baltimore City" at
a
rate
"not l<:ss
than
the minimum
wage
required
by
the Fair
Labor Standards Ac(');
Id.
§§2-1 - 2·6 (establishing Wage Coountssion to receive and investigate wage law
violation.~);
id.
§§
4.1 - 4.11 (establishing enforcement protocols for
the
minimum wage law).
$
State law may preempt local Jaw in one of three ways: preemption
by
conflict, express preemption. or implie(.l
preemption.
See Altadt!,· U.S.A, Inc. v. Prince George's
County.
431 Md.
307,
31
J,
65 A.3d ltS, 120 (2013).
As
the Court in
Sitnick
found a local minimum wage law
that
set a
nigher
rate did not create a conflict with State law,
and there is no express statement
in
the State's Wage and Hour
Law
that
indicates it supersedes all local laws, a
reviewing court
would
likely proceed using the Court of Appeals' implied preemption analysis.
f>
7
S(!e Allied Vending, Inc. v. Bowie,
332 Md. 279, 299, 631 A2d 77 (1993) (citations omiued).
 PDF to HTML - Convert PDF files to HTML files
James Stowe
October 11,2013
Page
3
4)
Whether the state law expressly provides concurrent legislative authority to
local jurisdictions or requires compliance
with
local ordinances;
5) Whether a state agency responsible
for
administering and enforcing state law
has recognized local authority to act in the field;
6)
Whether the particular aspect of the field sought to be regulated by the local
government has been addressed by the state legislation; and
7)
Whether
a
two-tiered regulatory process ex.isting if local laws are not pre­
empted would engender chaos and confusion.
8
Under these factors, the County's minimum wage law is valid and not preempted by the
State's Wage and Hour Law. Baltimore's minimum wage law has been in effect since
1966
and
enforced concurrently with the State's minimum wage law. Additionally, the State agency that
oversees enforcement of the Wage and Hour
Law
expressly
recognizes
local authority to act in
the field in
itc;
publications, which identify Ba1timore as jurisdiction in which an individual
may
pursue
a
violation of minimum wage laws.
9
Under the analysis developed by the Court of
Appeals after
Simick.
the ongoing existence for four decades of minimum wage laws and
enforcement schemes at both the State and local level weighs in favor of finding that the State
did
not preempt the field of minimum wage regulation.
10
To avoid any claim that the minimum wage law is not a local law designed to regulate
only within the County, the County should be clear in the law, its legislative history, and its
enforcement that the law only applies to employers in the County and for work perfonned in the
County.
I I
8
See Allied Vending, Inc. v. Bowie,
332 Md. 279, 299-300,631 A.2d 77 (1993) (citations omitted).
See The Maryland Guide to Wage Payment and Employment SlandMcis,
published
by
the
Employment
Standards
Service of the Maryland Division of labor and Industry, Department of Labor, Licensing and Regulation,
available
9
at
Illlp:!/ww·w.dllr.slare,md.us/labo,./wageppy(wpremedies.shlmmjurj,~dif1i()n
(identifying
Baltimore as a potential
jurisdiction in which a
claimant may
a
claim).
me
The Coun of Appeals in
Silnick
also nol.c:d that "[t]here is a presumption of statutory construction that the
Legislature acts
with
the
knowledge of
existing
laws
on
the
subject malter under construction.
n
See Sitnick,
254 Md.
at
322, 255 A2d
al
385.
The Court found that General Assembly's silence on Baltimore's 1966 minimum wage law
in
its
1967 and 1968 sessions undermined any argument that
the
Scate intended
10
preempt the field of minimum
wage
regulation.
See id.
at
308, 322, 255 A.3d
at
378,385. Four decades'
worth of General Assembly sessions
without a repeal of Baltimore' s minimum wage law only adds more weight to tbe view that the State did not intend
to
preempt local mmimum wage laws.
10
See, e.g., Holiday Universal,
Inc.
v.
Montgomery·
County,
377 Md. 305,833
A2d
518 (2003) (holding County law
was invalid under
Maryland
Constitution because of its substantial territorial affect outside
the:
County and was not a
local
law).
Baltimore's minimum wage law is clearly restricted to employees
and
employers
in
Baltimore City.
See
Ballimore. Md, Code
§§
1-1 (2010) (defining employer as certain entities or individuals employing 2 or more
persons "in
the
City of Baltimore");
id.
§
3,
I (requiring payment of
minimum
wage
by
"every
employer
operating
It
and
doing business
in Baltimore
City"
to "each
employee
in the City"
(emphasis added).
 PDF to HTML - Convert PDF files to HTML files
James Stowe
October 11, 2013
Page 4
If
you have any concerns or questions concerning this memorandum
please call
me.
Enclosure
(bill)
cc:
Kathleen Boucher. Assistant
CAD
Robert
H.
Drummer. Senior Legislative Attorney
@
 PDF to HTML - Convert PDF files to HTML files
ROCKVILLE, MARYLAND
MEMORANDUM
October 21,2013
TO:
FROM:
Nancy Navarro, President, County Council
Jennifer
A.
~,
Director, Office
ofMana~dget
Joseph F.
€9~h:'Director,
Depar1ment of Finan
.,(/
SUBJECT:
Bill 27-13, Human Rights and Civil Libelties - County Minimum Wage - Dollar
AmOl.mt
n
Please find attached the fiscal and economic impact statements for the above­
referenced legislation.
JAH:ha
c: Fariba Kassiri, Assistant Chief Administrative Officer
Kathleen Boucher, Assistant Chief Administrative Officer
Lisa Austin, Offices of the County Executive
Joy Nurmi, Special Assistant to the Cotmty Executive
Patrick Lacefield, Director, Public Information Office
Joseph F. Beach, Director, Department of Finance
Michael Coveyou, Department of Finance
Robert Hagedoom, Depar1ment of Finance
David Platt, Department of Finance
James Stowe, Human Rights Commission
Pam Jones, Department of General Services
Philip Weeda, Office of Management and Budget
Henri ApoHon, Office of Management and Budget
@
 PDF to HTML - Convert PDF files to HTML files
Fiscal Impact Statement
Bill 27-13, Human Rights and Civil Liberties - County Minimum Wage - Dollar Amount
1. Legislative Summary.
Bill 27-13 would establish a minimum wage in the County for private sector employees
working in the County unless the State or federal minimum wage is greater than the
County's minimum wage. The County's minimum wage would be phased in over several
years. The minimum wage would start at $8.25 per hour beginning on July 1,2014,
increase to $9.75 per hour beginning on July 1,2015, and increase to $12.00 per hour
beginning on July 1,2016. Beginning on July 1, 2017, the $12.00 rate would be raised by
any increase in the Consumer Price Index on an annual basis. The bill provides a credit to
employers who provide health insurance to employees in the COl..mty. The bill authorizes
the Director of the Office of Human Rights to enforce its provisions and the Human
Rights Commission to award relief for any violations.
2. An estimate of changes in County revenues and expenditures regardless of whether the
revenues or expenditures are assumed in the recommended or approved budget. Includes
source of information, assumptions, and methodologies used.
A person may file a complaint with the Director ofthe Office of Human Rights for a
violation of the wage requirements in this bilL According to the Office of Human Rights,
a similar program in the city of Baltimore's Office of Civil Rights and Wage
Enforcement has three investigators enforcing its living wage law and investigates
between 175 and 250 complaints each year.
It
is unknown how many complaints would
be filed in Montgomery County each year so the effect on the Office of Human Rights'
case load cannot be determined at this time. The Office would need to monitor its
workload for a period oftime to assess the legislation's actual impact. Assuming the city
of Baltimore's experience, however, the County's cost could be $346,980 annually for
.
three investigators and an office services coordinator.
1
The Office of Human Rights would be authorized to assess civil penalties of$500 each
for violations of the minimLUn wage requirement.
It
is unknown how many complaints
would result in civil penalties, but assuming 175 to 250 complaints annually, fine revenue
could be up to $87,500 to $125,000 per year. This is an upper limit estimate since it is
possible that not all complaints would result in the assessment ofa penalty.
The bill would not affect the County's contracts subject to the living wage or prevailing
wage requirements since they are both above the minimum wage requirement in this bill.
3. Revenue and expenditure estimates covering at least the next 6 fiscal years.
Assuming the complaint rate noted above, expenditures over six years could be
$2,081,880 and revenues could be between $525,000 and $750,000.
Two grade 23 Investigator II positions, one grade 25 Investigator Ill, and one grade 16 Office Services
Coordinator, aU at
mid~point.
The cost estimate includes group insurance, retirement, and payroll taxes. According
to the Office of Human Rights, the skill set needed to investigate and enforce the minimum wage requirement is
different than the Office's exjsting complement of investigators, therefore, the implementation of this legislation
will require some level of additional staffing,
I
 PDF to HTML - Convert PDF files to HTML files
4.
An
actuarial analysis through the entire amortization period for each bill that would affect
retiree pension or group insurance costs.
Not applicable.
5. Later actions that may affect future revenue and expenditures if the bill authorizes furure
spending.
Not applicable.
6.
An
estimate of the staff time needed to implement the bill.
See number 2.
7.
An
explanation of how the addition of new staff responsibilities would affect other duties.
See number 2.
8.
An
estimate ofcosts when an additional appropriation is needed.
See number 2.
9. A description of any variable that could affect revenue and cost estimates.
The number of complaints, resulting investigations, and assessment of civil penalties are
the primary variables that could affect the County's revenues and costs.
10. Ranges of revenue or expenditures that are tmcertain or difficult to project.
See number 2.
11. If a bill is likely to have no fiscal impact, why that is the case.
Not applicable.
12. Other fiscal impacts or comments.
Not applicable ..
13. The following contributed to and conclllTed with this analysis:
James Stowe, Office of Human Rights
Pam Jones, Grace Denno, Department of General Services
Phil Weeda, Office of Management and Budget
10
Date
/"2.1/19
 PDF to HTML - Convert PDF files to HTML files
Economic Impact Statement
Bill
27-13,
Human Rights and Civil Liberties­
County Minimum Wage - Dollar Amount
Background:
This legislation would:
• Require certain private sector employel's in the County to pay a minimum wage to
employees working in the County,
• Provide a credit for an employer who provides health insurance to employees
working in the County,
• Provide enforcement by the Office ofHuman Rights and the Human Rights
Commission,
• AuthOlize the Human Rights Commission to award relief for violations; and
• Generally regulate the minimum wage paid to a private sector employee working
in
the County.
Bil127-13
(Bill)
would establish a minimum wage in the County for private sector
employees working in the County unless the State or Federal minimum wage is greater
than the County's minimum wage. The County's minimum wage would be phased in
over several years. The minimum wage would start at $8.25 per hour beginning on July
1,2014, increase
to
$9.75 per hour beginning on July 1, 2015, and increase to $12.00 per
hour beginning on July 1, 2016. Beginning on July 1, 2017, the $12.00 rate would be
raised by any increase in the Consumer Price Index on an annual basis.
1. The sources ofinformation, assumptions, and methodologies used.
The sources of infOlmation include various economic studies that analyzed the effects
ofincreasing the minimum wage on employment. Those studies include the
following:
• David Card and Alan B. Krueger, "Minimum Wages and Employment: A
Case Study ofthe Fast-Food Industry in New Jersey and Pennsylvania",
The
American Economic Review,
Volume 84, Number 4, September 1994.
• David Neumark and William Wascher, "Minimum Wages and Employment:
A Review ofEvidence from the New Minimum Wage Research, NBER
Working Paper Series, National Bureau ofEconomic Research, November
2006.
• om
Ropponen, "Reconciling the Evidence of Card and Krueger (1994) and
Neumark and Wascher (2000)", Discussion Paper No. 325, Helsinki Center of
Economic Research, Apri120 11.
Page 1 of4
 PDF to HTML - Convert PDF files to HTML files
Economic Impact Statement
Bill 27 13, Human Rights and Civil Liberties ­
. County Minimum Wage - Dollar Amount
w
• Saul D Hoffman and Diane M. Trace, "NJ and P A Once Again: What
Happened to Employment When the PA-NJ Minimum Wage Differential
Disa~peared?",
Eastern Economic Journal,
Volume 35) 2009.
• John P. Fornby, John A. Bishop, Hoseong Kim, "The Redistributive Effects
and Cost Effectiveness of Increasing the Federal Minimum
W~ge",
Employment Policy Institute, October 2009.
There is disagreement among economists as to the economic impact of minimum wages.
This disagreement is based on two models of economic analysis:
• The "neoclassical" model of demand and supply that by requiring a minimum
wage above the equilibrium wage established by the demand and supply of labor
would result in unemployment The result, it is argued by some economists. is
there would be a greater number ofindividuals willing to work at the higher wage
rate while a lower number ofjobs would be availa,ble at that rate.
• An
alternative model to the "neoclassical" model is that low-wage labor markets
are characterized as
monopsonistic
competition whereby employers have
significantly more
market power
than do workers. This monopsony could be the
result ofpricing power by the employer, that
is~
he or she is able to pass along the
increase in the wage rate through higher prices. This ability to pass on the wage
increase is attributed to the
elastic/inelastic
demand for the product by the
consumers.
Card and Krueger argued that the negative employment effects on the minimum wage
laws range from minimal to non-existent.
In
subsequent research. Neumark and Wascher
analyzed the effect of increases
in
the
minimum wage for large fast food restaurant chains
that were followed by decreases in employment.
Ropponen reconciled the differences between Card-Krueger conclusion and Neumark­
Wascher conclusion. Both studies, according to Ropponen, lead to the conclusion that
the conditional employment effects are positive for small fast-food restaurants but
negative for big fast-food restaurants. He suggests that the effect of an increase in the
minimum wage on employment is based on the location of restaurants and a demand side
effect:
An
increase in the minimum wage would have multiplier effect on the local
economy> that is, the increase
in
wages would result
in
an increase spending by the
employees.
Alan Blinder, former Vice Chairman of the Board of Governors of the Federal Reserve
System, suggests three reasons minimum wages do not affect employment: higher wages
may reduce turnover and therefore training costs, raising the minimum wage may
eliminate the problem of recruiting workers at a higher wage than current workers, and
minimum wage earners represent a small portion of the employer's cost that an increase
is relatively insignificant to the employer's total cost of production.
Page 2 of4
@
 PDF to HTML - Convert PDF files to HTML files
Economic Impact Statement
Bill
27-13,
Human Rights and Civil Liberties­
County Minimum Wage - Dollar Amount
Based on 2012 data from the Bureau of Labor Statistics (BLS) and the Maryland
Department ofLabor, Licensing and Regulation, there were 67,000 employees in
Maryland earning at or below the minimum wage which represents just 2.3% of tbe total
state workforce as measured by the labor force series data. Since the 2012 data
are~
based
on a survey ofhouseholds nationwide, there is no specific
data
on minimum wage
employees in Montgomery County. Based on BLS data, minimum wage employees are
typically in the leisure and hospitality industry, retail, and education and health services.
In
tenns ofoccupations, nearly 44% are in food preparation and serving related
occupations nationwide.
2. A description of any variable that could affect the economic impact estimates.
• The ability ofthe employer to pass the increase ofthe minimum wage to his or
her customers
• The share ofminimum wage eamers to total employment for a particular business
• The elastic/inelastic demand for the business's product or service
• The costs of retraining workers
• The extent to which higher minimum wages induce greater spending
in
the local
economy
3. The Bill's positive or negative effect,
if
any on employment, spending, savilng,
investment, incomes, and property values in the County.
As stated previously, there is no consensus among economists on the effects ofthe
minimum wage and employment. Based on the review ofthe research, it is not certain
whether an increase in the minimum wage would increase or decrease employment. This
uncertainty is based on the following factors presented in Section 2:
• The ability ofthe employer to compensate for the increase in the minimum. wage
by passing such increase onto customers with higher prices
• The proportion ofthe wage costs among workers earning the minimum. wage to
the total costs of production
• The multiplier effect ofincreasing the minimum wage on the local economy
Finally, in the research studies presented above, the conclusions are based on the d-atasets
used to determine the effect ofthe minimum wage on employment, the statistical
methods used to reach those conclusions, and the model used as the theoretical
framework to conduct the analysis.
4.
If
a BiU is likely to have no economic impact, why is that the case?
It
is uncertain whether increasing the minimum wage would increase or decrease
employment among low-wage workers. As stated in Section 3, the economic impact
Page 3 of4
 PDF to HTML - Convert PDF files to HTML files
Economic Impact Statement
Bill
27-13,
Human Rights and Civil Liberties­
County Minimum Wage - Dollar Amount
would be based on the assumptions and the characteristics and location ofthose
businesses that
would
be required
to
raised the
minimum wage.
5. The following contributed to and concurred with this analysis: David Platt and
Rob Hagedoom, Finance.
Josep F. B aeh, l$irectt5r
f
Department ofFinance
Date
.
Page 4 of4
 PDF to HTML - Convert PDF files to HTML files
Economists disagree on whether the minimum wage kills jobs. Why?
I
Wonkblog
Page 1 of2
~
Print
Economists disagree on whether the
minimum wage kills jobs. Why?
By Brad Plumer, Updated: February 14,2013
What happens when the minimum wage goes up? In theory, this should be simple. A
hike in the minimum wage raises the cost of low-wage workers. That should make
finns less likely to hire those people. Unemployment should rise. Basic Econ 101,
right?
Except that the real world seems to be much murkier. Yes, a number of studies have
found a link between a higher minimum wage and higher unemployment. But many
others, such as this recent paper from U.C. Berkeley that exploited differences across
state borders, have found no effect at all. Quite often, hiking the minimum wage by a
buck or two doesn't appear to worsen unemployment in any noticeable way.
This poses a conundrum. Why might the basic theory be wrong? That's a question
that John Schmitt of the Center for Economic and Policy Research explores in this
new paper (pdf). He runs through a slew of theories for why a modest minimum-wage
hike might not affect employment levels much. Basically, there are a variety of ways
that labor markets can respond - and they don't all involve more unemployment:
1) Employers can respond by cutting back on benefits or hours or training:
Yes,
a higher minimum wage means that companies have to pay their low-wage workers
more. But that doesn't mean they have to hire fewer workers. Perhaps businesses
adapt by cutting back on other things, like health-care benefits or hours. Schmitt
notes, however, that there's little conclusive evidence that employers do this.
2) Employers can respond by cutting wages for
other,
higher-paid workers.
One
survey found that half of employers faced with a minimum-wage hike "would delay
or limit pay raiseslbonuses for more experienced employees." If that actually
happens, then the minimum wage might help low-wage workers at the expense of
better-paid workers. This could even boost GDP
in
the short run if poorer workers are
more likely to spend the cash.
3) Companies can raise their prices in response.
One obvious possibility is that
finns with lots of low-wage workers - say, fast-food restaurants - simply pass
along their extra costs to customers. One major literature review found that a 10
percent hike in the minimum wage leads, on average, to a 4 percent increase in prices
at companies affected.
4) Companies can just settle for fewer profits.
Another possibility is that
companies just take the hit and accept lower profits rather than laying people off.
Research on whether this happens is pretty inconclusive, however.
 PDF to HTML - Convert PDF files to HTML files
Economists disagree on whether the minimum wage kills jobs. Why?
I
Wonkblog
Page 2 of2
5)
Employers can respond by becoming more efficient.
If minimum-wage workers
suddenly cost a bit more, perhaps businesses will react by trying to squeeze more
productivity out of them. Schmitt notes that there's some evidence that this happened
in fast-food chains in Georgia and Alabama. Managers started requiring better
attendance and asking their employees to take on extra duties in response to a
minimum-wage hike.
6)
Workers themselves might respond by voluntarily working harder.
Schmitt
notes that there have been plenty of theoretical papers written about how people
might work harder and be more productive if they're suddenly paid more. Some of
these models could even explain why a hike in the minimum wage doesn't lead to
higher unemployment. But, Schmitt adds, there's not much empirical evidence here.
7) Companies might actually
save
money from a minimum-wage hike because
there's less employee turnover.
If minimum-wage workers get a raise, they're far
more likely to stay on the job longer. And that's good for employers. After all,
constant worker turnover is a pain
there's the cost of screening, of training, of
vacancies. Schmitt notes that lower turnover could ease the costs of higher wages.
That could explain why employment levels don't really change.
So what's the right answer? A mix of these, most likely. "Individual establishments
will follow different paths that depend on a complex set of circumstances that
economists... cannot fully capture or explain," Schmitt concludes. Some companies
bump up their prices in response to a minimum-wage hike. Others make their workers
take on more tasks. Still others reap the benefits of reduced turnover.
This could explain why economists often have trouble establishing a clear link
between a higher minimum wage and higher unemployment. There are lots of
possible ways that companies can adjust to modest wage hikes besides hiring fewer
people. (Obviously if the minimum wage shot up to $100 per hour, that'd be much
more disruptive, but no one is proposing that.) The basic economic theory is alluring.
But the world isn't always that simple.
Further reading:
--The full paper (pdf) by CEPR's John Schmitt, titled "Why Does the Minimum Wage
Have No Discernible Effect on Employment?"
--Four things to know about President Obama's proposal to raise the federal minimum
wage to $9 per hour.
--Adam Ozimek argues that we could settle this debate by experimenting with
randomized trials for the minimum wage.
© The Washington Post Company
@
http://vvww. washingtonpost.comlblogs/wonkblog/wp/20 13/02114/why-economists-are-so-...
11/19/2013
 PDF to HTML - Convert PDF files to HTML files
E.mlnl~
266
27-1013
31-1011
31-1013
,..UI...,
$7.57
$1l,59
$11,82
$10.61
11
.83
11
.51
9
.49
11.18
10.01
Eiompllon Rllson,
265
362
4876
167
233
2ll
1582
1931
7094
-1
9
341
10
Fine
Artists,
Including Painters,
Sculptors, and
lUustrators
Home Health Aides
P
~ychjatric
353
4535
157
232
229
1494
1849
0.3%
3%
$7.44
$11.49
$11.59
$10.18
11
.9
10,32
8
.g:)
10.45
9
.48
8"-'
6%
0
0
.02
Aides
31-2022
31-0095
35·2011
35·2021
35·3021
Physical Therapist Aides
Pharmacy
Aides
Cooks, Fasl
Food
Combined Food
Preparation
and
Serving Workers.
Induding
Fast Food
"i@'.'&.
35-901 1
35·9021
35·9031
37-2012
39·1012
39·2011
39-2021
39301}
Food Preparation Wor\.ers
6570
88
82
524
0
.06
0.04
0.08
OW1ler
AUundanl.S.
cafeteria.
FOOd
concession
,
and
Co((e-e
,1ct"f~
0I11r!
W
"
,1r~~)e~
(Hi
SUIVl!t~ ~JOIHt::~,.IILf.l,..,1
Dining
Room
and
Cafetena
Attendants and Bartender
Helpers
Dishwashers
Hosts
and
Hoslesses
,
Restauranl,
Lounge
,
and
Coffee
Shop
Maids and Housekeeping
Cleaners
1515
1740
10t6
1551
1796
1047
10828
59
480
3397
38
56
31
209
20
III
0
.02
0.03
0
.03
0
.02
4%
4%
0
.04
9
.62
9.34
9
,3
10,18
$10.91
$10,15
10.09
11.1
2
9.84
9
.77
10.27
$10.94
$10.14
10.52
10619
57
460
3264
l~
Slot
Supervisors
Animal Trainers.
Nonfarm
Animal Caretakers
f"lo(I(lI\
r,C!U
ll'
P';JJl'~1IL")I.ts
Montgomery
Co unty, MD
it:?N
U....".
Lobb~
Attendlnu,
on<!
Tldcol Tlken
:
221
L
·W
f1f'§'Z_nfiWWlll.?f'iJW'p
uffi
IlRE
UIII:
'ltf
0
.01
11·1-
8.60
....
:
lWiJW"iI"!'fJf'
mi,ht
be
Upped
work-EU
Some of them m1lht
be
baby5itteu. on
..
~I$uill
basis
V
l
V4
7717
_ _1964 _ _
247
0.03
8.n
'
.34
9.18
CID
 PDF to HTML - Convert PDF files to HTML files
47-3012
47-3016
Helpers-Carpenters
151
41
161
39
10
-2
0.07
9.52
10.33
51-6011
Laundry and Dry-Cleaning Workers
1230
190
1263
199
33
0.03
0.05
10.39
9.76
11.94
Pressers, Textile. Garment, and Related Materials
9.B
53-6031
Automotive and Watercraft Service Attendants
205
199
-6
.(l.03
9.95
11.00
2013 Total Employment with hourly wage below $12
2013 Total Employment In Montgomery County, MO
Percent of Total Employment with hourly wage below $12 for Montgomery County, MO
Average hourly wage in Montgomery County, MO
Source:
EMS I
nl48
659443
11.70%
$27.18
Most of these occupations
with
wage lower than $12 have experienced some growth during 2012 to 2013
®
 PDF to HTML - Convert PDF files to HTML files
S2401: OCCUPATION BY SEX AND MEDlAN EARNINGS IN THE PAST 12 MONTHS UN 2012INFLATION·ADJUSTED DOLLARS! FOR THE CIV1L1AN EMPLOYED POPULATION 16 YEARS AND OVER
'::U I':: ""1111;l11"'<'I11 ..... VIlUTlUIUl
. ,.... I .... 1;l
r-
1 0:(11
;:'11111<'110:;:'
Subiect
Montoomerv Countv. Marvland
Total
Estimate
MarcWtof
Male
Estimate
51.20%
Maroinof
+/-0.5
Female
Estimate
48.80%
Maroin of
+/-0.5
Median earnings (domars)
Estimate
51,190
Marainof
+/-764
Median earnings (dollars)
In; m.l.
Median earnings (dollars)
stimate
Mar In of
+/-2,234
Civilian employed population
16
years and over
Manaqement business science. and arts
OCClJ
ations:
Mana ement business and rlnancial occu ations:
Mana ement occu ations
Business and financial
0
erations occu alions
Computer enaineerina. and science oC(;lloations'
Computer and mathematical1
occupations
Archi ecture and enQineerlnQ occupations
life, phvsical and social science occuoations
Education. Ie al community service. arts, and media
Communi and social services occu ations
le al occu ations
Education trainlna. and librarv occuoations
Arts desian entertainment. sports and media
OCctl
ations
Healthcare practitioner and technical occuoations:
Health diaQnasinQ and treatinQ practitioners and other
Health technalo ists and technIcians
Service accu ations·
Heatlhcare su 0 occupations
Protective service occu ations'
Fire fighting and prevention, and other protective service
workers including supervisors
Law
enforcemeo
wQrk~'s
includinQ supervisors
.
ar lion
a
I
Food
nM
r
I'
Buildin and orounds
cleanin
and
mal1tenance occu alions
Perso al care and service occupations
Sales and office occupations:
Sales and related occupations
Office and administrative SllPport occuoations
Natural resources construction and maintenance
FarminQ, ftshinQ, and forestry occupations
Construction and extraction occupations
Installation maintenance and re air occu atlons
Production transoortation. and aterial movin occupations:
Production occu ations
Transportation occupations
Material movina occuoations
PERCENT IMPUTED
Occupation
530,886
297930
118444
76741
41703
68853
38923
11066
18864
78347
8951
18200
+1-5,949
+/-5956
+/-4242
+/-3626
+/-3072
+/-3975
+/-2903
+/-1550
+1-1805
+/-3550
+/-1560
+/-1928
+/-2797
+1-1855
+/-3.047
+/-2829
+/-1315
+/-5031
+/-1535
+/-1203
+/-1,137
+/-67
Estimate
60,412
Mar i of
+/-2,179
42,449
65767
7 584
84137
69888
78969
81378
75246
77 419
48699
50.90%
52.10%
56.80%
43.40%
65.90%
67.30%
80.80%
54.40%
41.90%
41.90%
59.90%
29.70%
48.30%
36.20%
37.80%
29.90%
42.00%
16.00%
35233
15963
32286
25746
6540
83638
9514
7820
5,873
1947
81.80%
82.30%
80.00%
42.4(Y%
20.70%
37.90%
54.70%
24.70%
97.30%
100.00%
97.40
G
o
97.20%
81.40%
64.70%
90.80
0
88.80%
+/-1.1
+/-1.8
+/-2.3
+/-4.2
+/-2.4
+/-3.5
+/--5.3
+/-4.7
+/-2.5
+/-8.6
+/~5
2
+/-3.4
+/-4.9
+/-4.1
+/-4.7
+/-9.9
+/-2.8
+/-6.5
+/-5.4
+/-6.8
+1~1
.~
4910%
47.90%
43.20%
56.60%
3410%
32.70%
19.20%
45.60%
58.10
0 0
58.10%
40.10%
70.30%
51.0%
63.80%
62.20%
70.10%
58.00%
84.00%
1820%
17.70%
.
+/-1.1
+/-1.8
+/-2.3
+ -4.2
+/-2.4
+/-3.5
+/-5.3
+/-4.7
+/-25
+/-8.6
+/-5.2
+/-3.4
+/-4.9
+/-4.1
+/-4.7
+/-9.9
+/-2.8
+/-6.5
+/-5.4
+/-6.8
+/-1
'~7
79444
86.601
94652
75750
90.074
91174
86709
86658
56837
46770
130 66
46.557
56424
73401
4755
39201
20843
25.294
45367
32,304
5161
18029
18.231
34830
3044
37557
36134
33.384
34582
40.991
28605
31.408
+/-2443
+/-3637
+/-5963
+ -5 007
+/-3.538
+/-3307
+/-6709
+/-8239
+/~2
832
+/-5638
+/-11235
+/-3426
+/-7612
+/-4054
+/-6907
+/-13423
+/-1027
+/-3220
+/·7670
+/-14,362
95381
100820
105.640
85037
96407
96275
92828
100630
80.325
47346
155595
63.032
66609
100934
131031
46411
25.465
3 58
45756
37,168
+/-3554
+/-1588
+/-7921
+/-11241
+/-3.479
+/-5097
+/-7845
+/-5016
+/-8738
+/-10341
+/-11017
+/-12690
+/~8
767
+/-14654
+/-33050
+/-21 588
+/-1.413
+/~20
225
+/-9500
+/-13,013
+/-13.89
+/­
515
45331
84005
0722
48062
64375
72164
37581
17 810
24.784
42054
19,857
7176
+/-1989
+/-4548
+/-5251
+ -5 993
+/-3777
+/-4.88-4­
+/-8986
+/-10.807
+/-2924
+/-7085
+1-22 846
+/-4619
+/-4.722
+/-6652
+/-6625
+/-11230
+/-1.732
+/-3395
+1-21
835
+1-23,841
+/-21 053
H""'60Q
+1-1.9<4;
+/-3
6
+/-1881
+/-4609
+/-1725
+/-13303
+/-10817
+/-54790
+/-4178
+/-4.892
+/-45.926
+/-1676
.0
23996
19388
95188
41891
53297
31050
-
.1'3
+/-26s.t
+/-2337
+/-4874
+/-3364
+/-3566
+/-2647
+/-132
+/-2.831
+1-1557
+/-2.749
"'1-1474
+/-1,770
+/-1019
0.00%
3
57.60%
79.30%
62.10%
45.30%
75.30%
2.70%
000%
2.60%
2.80%
18.60%
35.30%
9.20%
1120%
141
22,149
8760
23080
8075
11.834
3171
+/-5.1
+/-4.2
+/- .3
+/-3.9
+/-2.9
+/-1.4
+/-53.7
+/-1.9
+/-2.4
+/-3.9
+/-8.8
+/-4.6
+/-8.0
+/-5.1
+/-4.2
+/-2.3
+/-3.9
+/·2.9
+/-1.4
+/-537
+/-1.9
+/-2.4
+/-3.9
+/-8.8
+/-4.6
+/-8
a
30.522
21141
+1-10.437
...1
310
-
+ -1703
+/-3.965
+/-2597
+/-259
+/-2723
+/-3769
+ -59 48
+/~4
563
+/-8493
+/-2461
+/~5
143
+/-2483
+/-2130
75.7
7.
'
781
23270
0.163
37956
42190
36434
33384
35246
40.782
29063
17
n
15360
17 062
32038
19890
36877
13408
11859
60399
26743
26826
40864
23.601
36595
30.445
20.593
+1-5752
+ -5106
+1-3869
+/-4787
+/-7339
+ -4 249
+/-59430
+/-4702
+/-8179
+/-2345
+/-10743
+/-2.442
+/-2.520
..
5.70%
X
X
X
X
X
X
X
X
X
®
 PDF to HTML - Convert PDF files to HTML files
Workers Earning $1,250 per month or less
Work Destination Report - Where Workers are Employed Who Live in the Selection
Area - by Counties
Total All Private Jobs
2011
Count
Total All Private Jobs
Share
Jobs Counts bv Counties Where
Workers are Employed -
All
Private Jobs
2011
Count
Montgomery County, MD
District of Columbia, DC
Prince George's County, MD
Baltimore County, MD
Howard County, MD
Anne Arundel County, MD
Fairfax County, V A
Baltimore city, MD
Frederick County, MD
Arlington County, V A
All Other Locations
Share
-39,945
51.3%
9,570
6,205
2,893
2,751
2,541
2.325
1,600
1,520
921
7,568
12.3%
8.0%
3.7%
3.5%
3.3%
3.0%
2.1%
2.0%
1.2%
9.7%
®
Page: 1
Source
:
U.S. Census Bureau, OnTheMap Application, http://lehdmap.ces.census
.gov
 PDF to HTML - Convert PDF files to HTML files
ReRorL
S~ttin.gL
Analysis
Type
Destination Type
Selection, area as
Destination
Counties
Home
2011
All PrIvate Jobs
Montgomery County, MD from Counties
10,592
11/19/201312:53
-
OnTheMap 6.1.2
J
-
-
Year(s)
Job
Type
Selection Area
--
--
Census
Blocks
Selected
Code Revision
LODES Data Version
-
Analysis Generation Date
9d7fa6cdc7ba3d7a4fcd786475dbfc9a2ddda386
I
20130430
_
.'1
Source: U.S. Census Bureau
,
OnTheMap Application and LEHD Origin-Destination Employment Statistics (Beginning of Quarter Employment, 2nd Quarter of
2002-2011 ).
Notes:
1. Race, Ethnicity, Educational Attainment, and Sex statistics are beta release results and are not available before 2009.
2. Educational Attainment is only produced for workers aged 30 and over.
3. Firm Age and Firm Size statistics are beta release results and are not available before 2011.
----
-
-
-
~
Source: U.S. Census Bureau, OnTheMap Application, http://lehdmap.ces.census.gov
 PDF to HTML - Convert PDF files to HTML files
Workers Earning $1,250 per month or less
Home Destination Report - Where Workers Live Who are Employed in the
Selection Area - by Counties
Total All Private Jobs
2011
Count
Total All Private Jobs
~
Share
t
100.0%
Jobs Counts bl: Counties Where
Workers Live - All Private Jobs
2011
Count
Montgomery County, MD
Prince George's County, MD
District of Columbia, DC
Baltimore County, MD
Frederick County, MD
Anne Arundel County, MD
Howard County, MD
Baltimore city, MD
Fairfax County, V A
Carroll County, MD
All Other Locations
Share
39,945 47.6%
10,730
3,915
3,569
3,265
12.8%
4.7%
4.3%
3.9%
3.6%
3.4%
2.9%
2.7%
1.2%
1
I
3 002
2,815
1
2.41
1
2,247
988
10,964 13.1 %
Page: 1
®
Source: u
.S.
Census Bureau, OnTheMap Application
,
http://lehdmap
.ces
.census.gov
 PDF to HTML - Convert PDF files to HTML files
Report Settings
Analysis.Type
Destination Type
Selection area as
Year(s)
5
Destination
Counties
Work
2011
All
Private Jobs,
Montgomery County, MD from Counties
10,592
--
~
Job Type
Selection Area
~
Selected
Census
Blocks
Analysis Generation Date
-
11/19/2013
12:52 - OnTheMap 6.1
.2
9d7fa6cdc7ba3d7 a4fcd7864 75dbfc9a2ddda386
Code Revision
LODES Data Version
-
-
20130430
Source: U.S. Census Bureau
,
OnTheMap Application and LEHD Origin-Destination Employment Statistics (Beginning of Quarter Employment, 2nd Quarter of
2002-2011 ).
Notes
:
1. Race, Ethnicity, Educational Attainment, and Sex statistics are beta release results and are not available before 2009.
2. Educational Attainment is only produced for workers aged 30 and over.
3. Firm Age and Firm Size statistics are beta release results and are not available before 2011.
- --
-
-
-
-
-
~
Source
:
U.S. Census Bureau, OnTheMap Application, http://lehdmap.ces.census.gov
 PDF to HTML - Convert PDF files to HTML files
Journey to Work Commutation
MONTGOMERY COUNTY
TOTAL COMMUTERS
BALTIMORE REGION
Anne Arundel County
Baltimore County
Carroll County
Harford County
Howard County
Baltimore City
WASHINGTON REGION
Frederick County
Montgomery County
Prince George's County
SOUTHERN MARYLAND
Calvert County
Charles County
IN FROM:
OUT TO:
NET(ln - Out)
474,516
75,182
16,624
16,447
7,026
4,428
20,794
9,863
303,594
27,279
224,087
52,228
9,056
2,405
3,875
2,776
6,224
559
236
5,429
3,859
530
1,570
387
745
627
2,405
560
315
996
534
453,758
44,022
10,288
10,362
1,716
1,794
11,732
8,130
266,046
6,814
224,087
35,145
2,674
453
1,483
738
2,053
486
77
1,490
962
70
196
64
260
372
1,207
132
63
598
414
20,758
31,160
6,336
6,085
5,310
2,634
9,062
1,733
37,548
20,465
0
17,083
6,382
1,952
2,392
2,038
4,171
73
159
3,939
2,897
460
1,374
323
485
255
1,198
428
252
398
120
st.
Mary's County
WESTERN MARYLAND
Allegany County
Garrett County
Washington County
UPPER EASTERN SHORE
Caroline County
Cecil County
Kent County
Queen Anne's County
Talbot County
LOWER EASTERN SHORE
Dorchester County
Somerset County
Wicomico County
Worcester County
SURROUNDING STATES
District of Columbia
VIRGINIA
Accomack County
Arlington County
23,164
36,001
53
4,829
88,172
42,533
23
8,403
-65,008
-6,532
30
-3,574
 PDF to HTML - Convert PDF files to HTML files
Journey to Work Commutation
MONTGOMERY COUNTY
Fairfax County
Fauquier County
Frederick County
King George County
Loudoun County
Prince William County
Spotsylvania County
Stafford County
Alexandria city
Fa[rfax city
Falls Church city
Manassas city
Rest of Virginia
WEST VIRGINIA
Berkeley County
Grant County
Hampshire County
Jefferson County
Mineral County
Morgan County
Preston County
Rest of West Virginia
PENNSYLVANIA
Adams County
Bedford County
Chester County
Delaware County
Franklin County
Fulton County
Lancaster County
Philadelphia County
Somerset County
York County
Rest of Pennsylvania
DELAWARE
Kent County
New Castle County
Sussex County
ELSEWHERE
IN FROM:
OUT TO:
NET(ln - Out)
17,186
583
154
66
4,845
2,078
247
388
2,065
284
331
295
2,597
3,986
22,518
90
52
62
3,422
730
56
128
3,626
552
422
201
2,248
208
-5,332
493
102
4
1,423
1,348
191
260
-1,561
-268
-91
94
349
3,778
1,450
95
223
1,170
276
237
7
528
5,518
40
-
-
86
3
6
-
73
1,377
1,410
95
223
1,084
273
231
7
455
4,141
1,008
30
244
94
893
5
279
221
54
1,239
1,451
1,199
31
3
74
61
50
-
75
237
3
97
746
347
977
27
170
33
843
5
204
-16
51
1,142
705
852
203
772
224
4,328
61
239
47
4,157
142
533
177
171
Prepared by the Maryland Department of Planning, August
2012
Source: U.S. Census Bureau, OnTheMap Application and LEHD Origin-Destination Employment Statistics
 PDF to HTML - Convert PDF files to HTML files
Strategies for Assisting Low-Income Families
I
Brookings Institution
Page 1 of5
BROOKINGS
Paper
I
July 1, 2013
Strategies for Assisting Low-Income Families
By: Isabel V. Sawhill and Quentin Karpilow
Most Americans aspire to join the middle class, but many are failing to do so. In 2011, there
were 36 million working-age (25 to 55), able-bodied[1] adults in the United States whose low
wages or insecure attachment to a job in combination with their family responsibilities put
them in a low-income household. By low-income we mean a household in the bottom third of
the income distribution. For one reason or another-lack of a job or low wages-they have
failed to achieve the American dream. In this paper we look at who they are, why their
incomes are low, and what might be done to help them climb the ladder and join the middle
class. Throughout the paper we compare them to their more fortunate counterparts, those in
the top two-thirds of the income distribution. In 2011, the upper two-thirds had an average
income of approximately $65,000 while bottom-third households had only $14,000.
We focus on short, intermediate, and longer-term policies that might improve the economic prospects
of low-income households. In the short-run, what they most need is jobs. In the intermediate term,
even if they were employed, many of them would not earn enough to support a family unless their
wages were boosted by programs such as the Earned Income Tax Credit (EITC) or a higher
minimum wage. In the longer-term, they need better education and stronger families. Accordingly, we
look at each of these four paths to moving more low-income households into the middle class,
showing what each might achieve based on new estimates of the impact of each strategy on annual
earnings.
We look first at who is a part of this bottom third group and why their incomes are so low. Our data
are for 2011 (the most recent year available) and come from the Census Bureau's annual survey of
households in the U.S. We begin the paper with a focus on total household income. After showing
that most income comes from earned sources, we then focus entirely on annual earnings adjusted
for family size.[2] One reason we do so is because the evidence suggests that earnings are more
accurately reported in the data than income.
Using these data, we estimate how a return to full employment would affect their earnings. We also
estimate how increasing the minimum wage to $9.00 an hour, improving education, and increasing
marriages or cohabiting relationships among single parents would affect their economic
circumstances.
L ........ _ .
1'- ___
___
L
~_~
~
1_! _
_
..J~_
, _______
~ 1~
1__
____ . __ /"""
1 ....,
IIV'''' 1£\.,
_ ." _
~
_.L.