The Impact of Raising the Minimum Wage on the Maryland Economy
Raising the minimum wage rate has gained popularity at the local and state level over the past year with the effective hourly wage rate rising in 13 states on January 1, 2014. The President called for a higher minimum wage rate in his State of the Union message last year and recently has been speaking in support of an increase in the minimum hourly wage to $10.10. The District of Columbia, and Prince George’s and Montgomery Counties in Maryland each raised its minimum wage rate to $11.50 (over several years) at the end of 2013. These increases in minimum wages have been largely predicated on issues relating to increasing poverty on a growing income gap between rich and poor, or just because it is the “right thing to do” or “we can afford it” without actually understanding what the economies of higher minimum wages are or who will actually benefit. This report presents the economic consequences of raising the minimum wage rate in the State of Maryland from $7.25, the current national rate, to $9.00, to $10.00 and to $12.00.