L ast week Gov. Martin O?Malley strayed from his prepared notes for the State of the State speech to support a “living wage” for all those who work as government contractors.
At best, this idea will generate emotional satisfaction for those touting it.
At worst, it will hurt the most vulnerable in society it is meant to help ? those with minimal skills and limited education.
A living wage, as opposed to the minimum wage, is supposed to provide a suitable income to provide for basic needs such as housing and food and transportation.
Who could be against that? On the surface, no one.
But working families need jobs. And decades of studies show minimum wage laws make it harder for those who supposedly benefit from such laws, those with few skills and little education, to find work. The same principle applies to a living wage.
Besides, the bigger issue is hours worked rather than wages. As a 2003 Cato Institute study pointed out, a Bureau of Labor Statistics report from 2000 shows “only 3.5 percent of all household heads who worked fulltime 27 weeks or more over the course of the year fell below the poverty line.” The same report said that 80 percent of those surveyed for the study cited unemployment or involuntary part-time employment as the chief factors pushing them below the poverty line.
Another problem is that many of those the governor wants to ensure make a living wage ? construction workers, security guards and maintenance workers ? generally earn much more than the $11.95 proposed by backers of a bill in the General Assembly.
They will not benefit from a symbolic boost to their paychecks. For those it does affect, it means the state will owe millions more for services as it faces a looming structural deficit.
Raising taxes to pay for those wages certainly will not help the “working families” in Maryland O?Malley claims to champion.
If the governor really wants to help them, he will make the state attractive to business. That means finding ways to cut government waste, lower taxes and minimize regulation.
If even New York Gov. Eliot Spitzer, who as the state?s attorney general became famous for his zealotry in prosecuting ? in O?Malley?s words ? “wealthy special interests” who “try to profiteer on the backs of the working people of our state,” can admit onerous regulations make U.S. businesses less competitive, so can our governor. Class warfare rhetoric may win votes, but its policies serve only to hurt those who need jobs the most.
