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Montgomery County Council Approves Minimum Wage Increase to $15 Per Hour

The Montgomery County Council unanimously approved a plan to raise the minimum wage in the County to $15.

The Council approved Bill 28-17 which will increase the County’s minimum wage to $15 per hour on July 1, 2021 for large employers with 51 or more employees. Mid-sized employers with between 11 and 50 employees must raise wages to at least $15 per hour on July 1, 2023. Small employers with 10 or fewer employers must pay workers $15 per hour on July 1, 2024.

The bill was sponsored by At-Large Councilmember Marc Elrich, and co-sponsored by Councilmembers George Leventhal (At-Large), Hans Riemer (At-Large), Tom Hucker (District 5) and Nancy Navarro (District 4).

The bill has provisions for non-profit organizations with 501(c)(3) designations and eligible service providers to raise wages to $15 per hour by July 1, 2023, unless they are considered a small employer.

In addition, Bill 28-17 provides that the minimum wage must be adjusted annually for inflation according to the Consumer Price Index for urban wage earners and clerical workers (CPI-W), starting July 1, 2022. This bill also provides for an opportunity wage, which is equal to 85 percent of the County’s minimum wage for employees under the age of 20 for the first six months of employment.

The County’s current minimum wage is $11.50 per hour. Yesterday’s vote makes Montgomery County among the first jurisdictions in the nation to approve a $15 per hour minimum wage.

The bill now goes to County Executive Ike Leggett for his signature. Leggett has made it known that he will sign the bill.

Councilmember Marc Elrich, a candidate for County Executive in the 2018 elections, who was the lead sponsor of the bill said: “What we have done today is huge. By passing this bill we recognize that people who work deserve to earn a decent wage. Raising the minimum wage is good for families, for neighborhoods and for our schools.”

“I taught in a high-poverty school in Montgomery County for 17 years,” said Elrich, “and I saw up close the effects of poverty. Poor children live in homes where their parents are highly stressed about paying for rent, food and medical care – basic necessities of life. That stress has an enormous impact on their children, and those impacts have lasting effects.”

In January of this year, the Council voted of 5-4, for another measure to increase the minimum wage. That bill, Bill 12-16, would have extended the incremental minimum wage increases in County law to $15 by 2020 for many employees. That bill was criticized as being too much too fast, which resulted in the split vote. The scheduled increases under the old bill were based on the size of the employer. Workers whose employers had 26 or more employees would reach $15 per hour in 2020. Employers with 25 or fewer employees would reach $15 in 2022.

It was vetoed by County Executive Ike Leggett on January 23. The Bill which was approved yesterday was in response to Leggett’s veto.

Councilmember Rice, who represents Germantown and the UpCounty, was one of the four Council members who voted against the earlier version of the bill. The new bill was approved by all nine members of the Council.

“Increasing the minimum wage was a very difficult decision for me,” said Councilmember Craig Rice of District 2, in a statement. “Difficult because people of color continue to be unemployed at rates higher than whites, and especially among young people of color. Extending the time businesses have to increase the wage will allow for us to double down on investments in youth employment and workforce development programs that will help mitigate the unintended consequences associated with increasing the minimum wage.”

Just prior to the vote during the Council meeting Rice said, “We need to be staunchly focused on teen-minority employment, on youth employment, and on unemployment in our communities of color throughout Montgomery County.”

“Those are issues that continue to remain today, and will continue to remain, unfortunately, into our near future,” said Rice during the meeting. “This amendment (which extended the time businesses will have to adopt the new minimum wage) allows us to ramp up the concerns we have regarding the very topics I just discussed, giving us more time to be able to devote budget resources beefing up teen employment and workforce opportunities. It really is a key component for this working for everyone.”

He challenged this other members of the Council to continue to work for programs that will increase youth and minority youth employment in the county such as the Conservation Corps, TeenWorks, and Summer R.I.S.E. programs.

“I trust my colleagues, and I trust the advocates for this bill, that they will remain focused and committed to the issues that will remain after this vote. That is that a young black person who walks into a store is less likely to be employed than their white counterparts. The statistics are clear, and unless we continue to talk about those issues and ensure that those kinds of challenges are removed as barriers from young people for employment we are not giving everybody their fair share.”

In August, a study commissioned by the County found that increasing the minimum wage would cost the county thousands of jobs. However, that study conducted by Philadelphia-based firm Public Financial Management (PFM), was found to have major flaws. The study initially predicted that 47,000 jobs would be lost by 2022 if a $15 minimum wage was required. Howevever, later that month, the research group admitted to “a computation error” by a subcontractor led to overestimating the number of lost jobs in the County. The County and the PFM have mutually agreed that the flawed study will not be paid for by the County.

Council President Roger Berliner, who is also a candidate for County Executive in 2018, said, “From day one, I felt our task was to reconcile competing truths: the worthy cause of lifting up working people who struggle to make ends meet and the need to mitigate economic harm to our small business community, the economic engine of our County. Today marks an important day for workers in our County and reflects our community’s shared goal of increasing prosperity for all.”

Council Vice President Hans Riemer said “Today we have one more reason to be proud to call Montgomery County home. The minimum wage is part of a comprehensive economic opportunity agenda that I am pursuing on the Council, together with paid sick and family leave, our local earned income tax credit (EITC), a strong education system, affordable college, affordable housing, child care subsidies and pre-k for low income children, and high-quality public transportation.”

Councilmember George Leventhal, who is also running for County Executive in 2018, said, “I believe that the compromise the Council reached today on the minimum wage balances the concerns from the business community and the needs of working families. A wage rate of $11.50 an hour is not enough for working families in Montgomery County to make ends meet.”

“My biggest regret about this debate is that we have heard so little from the workers who earn $11.50 per hour. Mr. Leggett's study did not interview them, and although I made sincere efforts to recruit witnesses, we had very little testimony from minimum wage workers. They may be afraid to criticize their employers. They may have irregular work schedules. They may not have access to information about the County Council's work. But when we are making decisions about those who need the most help from government, I would like us to follow the dictum, "No decisions about us, without us.’"

“Having said that, my vote for this bill today is a sign of my great confidence in the future of Montgomery County’s strong, robust, diverse economy,” said Leventhal. “I understand there will be winners and losers. I do not take lightly the concerns of employers who will find that a wage mandate makes it difficult for them to pay the rent, keep the lights on, or even stay in business. However, the evidence of the past few years is that a rising minimum wage has not correlated with a rise in unemployment. Our County’s unemployment rate has gone down each year. I believe in the future of this County and I believe rising incomes at the bottom will benefit merchants, because increased spending money in the pockets of those with fewer resources is spent right away, on groceries, clothes, gasoline and other consumer goods that are sold by some of the very people who are complaining most vociferously about the minimum wage increase.”

“Further, I have been sitting on this dais for 15 years and I recall previous debates where affected parties exaggerated the negative effects of the legislation before us, which ultimately passed without harm,” continued Leventhal. “One of the very earliest controversies I encountered here was over the prohibition on smoking in bars and restaurants in 2003. Restaurant owners told us their world would come to an end if their customers were not allowed to stay in their establishments late at night, drinking lots of alcohol and smoking lots of tobacco. You can imagine how I felt about that, as Chairman of the County Council’s Health Committee. Councilmember Phil Andrews doesn’t serve here anymore, but each year after enactment of the smoking prohibition, he used to issue a press release marking the fact that restaurant tax revenue had increased every single year and that there was no adverse effect of prohibiting smoking – in fact, the evidence showed the opposite.”

The federal minimum wage is $7.25 per hour and has remained static since 2009. The State minimum wage is $9.25 in 2017 and will increase to $10.10 in 2018.

Montgomery County becomes the second jurisdiction in the area to approve a $15 minimum wage. In 2016, the Washington D.C. City Council okayed legislation calling for a $15 wage by 2020. The minimum wage in Prince George County is $11.50 per hour, while northern Virginia suburbs minimum wages are tied to the federal minimum wage of $7.25 per hour.

Photos by Germantown Pulse.

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