It?s never a good idea to pass legislation without knowing how much it will cost. And that is especially true in Maryland, where the state faces a $1.5 billion budget shortfall next year.
But that is exactly what the legislature did in passing a bill to force companies with state contracts to pay their workers a “living wage.”
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Gov. Martin O?Malley made passing this legislation a central part of his stump speech on the campaign trail last fall. Meant to help the “working families” of Maryland, the only thing it will do is drain their wallets in the form of higher taxes to pay for those wages.
The second issue is whether the legislation was even necessary.
How many people will receive higher wages as a result of this legislation? Did state legislators or the governor survey companies with state contracts to find out how many people would be affected by it? Do they even care about the answer? We?d like the answer at the end of this year.
We did not elect our state legislators to pass emotionally satisfying but pointless policies.
Nationally, fewer than 3 percent of hourly workers make the minimum wage, $6.15 in Maryland.
Even Wal-Mart, the national punching bag for unions and other activists decrying the retailer?s supposedly low wages, pays workers an average of $10 per hour in the state ? more than the $8.50 per hour mandated by the legislation for workers in rural areas. Employees of companies with state contracts in the Baltimore-Washington region would receive $11.30 per hour under the legislation.
Many workers make well above the $11.30 per hour already because of Maryland?s tight job market, where last month unemployment stood at 3.8 percent. With a 4 percent unemployment rate considered full employment, employers in the state face stiff competition for workers, which means higher wages for job-seekers.
The best solution would be to let competition decide worker compensation. The only thing wage controls will do is make government labor more expensive for those of us who pay for it ? taxpayers. We are not afraid to admit we are wrong and eagerly await evidence to the contrary. If Gov. O?Malley can not produce it, however, he must lobby to retract the legislation in next year?s General Assembly session.
