The new minimum wage law will be a hardship on small-business owners in food service, day care, amusements, or any company that hires entry-level workers. Most of those employees are part time or seasonal, with no previous skills or experience. There is a market value for what an employee contributes, and beginner employees aren’t likely to be worth $15 an hour.

Small-business owners face even higher increases in labor costs because they must raise pay for existing employees who make just over the minimum to keep up morale and productivity, and payroll taxes also go up. Where do they find the money? Raising prices could turn customers away, especially if it is a choice of dining out, entertainment, or buying something. Hospitality businesses have profit margins around 1 to 2 percent, so the belt can’t be tightened. The only remaining choice is to eliminate entry-level jobs and cut hours.

The editorial repeatedly references the federal minimum wage of $7.25, but Maryland’s hasn’t been at that level for a decade. This new law saddles these small businesses with a 48 percent increase in labor costs coming on the heels of a 39 percent increase over the last four years. Few hospitality businesses qualify for the paltry 18-month extension to raise the wage to 15, as many restaurants, day cares, and others have more than 14 workers — many of them working only part time.

There is a tipping point and we will now reach it. These jobs are vital to our state’s economy. Employees will be hurt, not helped, especially those who need that first job to learn important lessons about showing up on time and learning about the work world.

Mike O’Halloran

State director, National Federation of Independent Business


(3) comments



"The only remaining choice is to eliminate entry-level jobs and cut hours."

That claim is getting very old. It would have us believe that businesses hire more employees than they need out of the goodness of their hearts. The reality is that they hire only the number of people required. If the minimum wage increases, they must keep all of their employees and raise their pay.

The claim that a higher minimum wage = mass layoffs is absurd.

The minimum wage applies to (almost) all businesses, so it is fair.

The author does make a good point about entry level positions. Perhaps there should be a tiered wage:

* A probationary period for training and assessment. Let's say $10/hour for up to 30-45 days.

* A mid-level minimum of maybe $12.50/hour for up to 90 days.

* Then $15/hour after that.

Something like that.


Human capital is plentiful and will therefore be exploited by business owners without a minimum wage law. It's that simple. Low skilled workers need this protection just to survive day to day.



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