Following is a statement from NELP and the Montgomery County Fight for 15 Coalition in response to a new report on the impact of gradually raising Montgomery County, Maryland’s minimum wage to $15 issued by PFM Group Consulting and commissioned by Montgomery County Executive Isiah Leggett:
“This report cost Montgomery County taxpayers nearly $150,000, but isn’t worth the paper it’s printed on. Instead of engaging economists or policy experts, County Executive Leggett hired a consulting firm that helps public employers cut costs to tell us all that the sky will fall if Montgomery County gradually raises pay for working people. Montgomery County Council members should disregard this sham study as they debate the merits of a $15 minimum wage.
“PFM’s report comes to the baffling conclusion that a modest $3.50 hourly increase over 5 years will result in the loss of 47,000 jobs—a full 8 percent of the estimated low-wage workforce in 2022. These findings are at odds with more than forty years of credible research on the minimum wage showing that raising the wage floor is a good policy with broad benefits and little to no impact on employment.
“The errors in this report should not surprise, as PFM’s methodology wouldn’t begin to pass peer review in an academic journal. The consultants based their analysis on interviews and surveys of employers, who were asked to estimate the percent of their workforce they expected they would let go if the County’s wage floor increased to $15. But these kinds of employer surveys cannot be used to analyze the impact of economic policies. If well-designed, employer surveys may reflect the mood of responders, but they consistently overstate the likelihood of cutting jobs and cannot control for respondents’ bias.
“For example, in 2014, the Employment Policies Institute—a business group that can be counted on to oppose even the smallest minimum wage increase—surveyed employers in San Jose’s restaurant sector after the city raised its wage floor to $10, and found that two-thirds of the city’s restaurant employers reported reducing jobs or hours. However, the city’s employment data paints a very different picture: Employment in the city grew by 2.9 percent from 2014 to 2015, and by 2.1 percent from 2015 to 2016. Unemployment levels fell from 5.8 percent in 2014, to 4.6 percent in 2015, to 4.2 percent in 2016. Today, the city’s unemployment rate today is a low 3.9 percent.
“In contrast to PFM’s analysis, credible studies of approved or proposed minimum wage increases find that raising pay for low-wage workers to $15 or more raises worker pay with little to no effects on employment. This is as true for high-cost jurisdictions like Seattle and New York, as it is for mid-cost cities like Minneapolis.
“Montgomery County, with a relatively high wage of $11.50, a low unemployment rate of 3.5 percent, and some of the highest per capita and household incomes in the nation, is in a strong position to adapt to a gradual minimum wage increase to $15—much like the 25 states and cities that are currently transitioning to a $15 minimum wage without negative effects.
“The Montgomery County Council should ignore this fatally flawed study and raise the wage floor to $15 for all workers in the County, without exempting young or tipped workers or expanding carve-outs for small businesses. The costs of living in the County, which rival those of New York City and Seattle, make it imperative that the Council approves a $15 minimum wage. The benefits of this policy will not be limited to boosting pay for struggling workers. Local businesses and the County as a whole will also gain from an increase in consumer spending and a more dynamic economy, which will result from a $15 minimum wage.”
Mark MacCarthy, Coordinator
Working Group on Economic Justice
St. Dunstan’s Episcopal Church, Bethesda
“The study is not objective economic analysis, but the recycled opinions of employers. Its premise seems to be that the minimum wage should be whatever consensus results from employer surveys and focus groups. The coalition urges Montgomery county officials to put the interests of working people first and push ahead for a living wage of $15 per hour. As the accumulated experience of jurisdictions across the country has shown, this will increase wages without substantial job loss.”
Larry Stafford, Executive Director
“Sixty percent of Marylanders support a $15 minimum wage. This study is a clear attempt to validate the opinions of opponents to the wage increase and tamp down public support by threatening job losses for the county’s most vulnerable workers.”
Maria Naranjo, 32BJ Capital Area Leader
“When workers’ wages go up, they can take care of their kids, pay their rent and spend money on necessities in their local community. A raise to $15 will also reduce reliance on public assistance from a safety net that faces extreme cuts from the Trump administration, eventually placing a heavier burden on local taxpayers. Giving Montgomery County’s low-wage workers a leg up is good for workers, taxpayers and good for businesses. The time has come for the County Executive to put forward a clean bill to raise the wage—no exemptions and no more excuses.”
Dante Bishop, Legislative Coordinator
Maryland Working Families
“Raising the minimum wage is about economic justice, racial justice, and gender equality. A $15 minimum wage could make significant inroads in helping women and people of color make ends meet, closing persistent gender and race-based pay and wealth gaps, and improving educational and health prospects for children. Moreover, when consumer demand grows, businesses thrive, earn more profits, and create more jobs. We need workers to earn more money so they can spend more money, in turn, stimulating the economy. “
Rabbi Elizabeth Richman, Deputy Director & Rabbi in Residence
Jews United for Justice
“Hillel the Elder, a great Jewish sage, taught that the heart of Torah is to treat others as we would wish to be treated. This flawed study ignores the moral imperative of treating our neighbors and friends fairly. Jews United for Justice will continue to advocate for a fair wage for Montgomery County workers.”
Renato Mendoza, Advocacy & Policy Specialist
“As a large non-profit employer in Montgomery County, CASA (formerly known as CASA de Maryland) was not approached or called with regards to this study. We did not have the opportunity to contribute CASA’s point of view on raising the minimum wage to $15 per hour. Had we been approached by the authors, we would have stated that as an institutional policy and true to our commitment to social justice and working families, for the past 4 years CASA has been paying above the 2022 proposed rate to all of our full-time, part-time, and temporary employees. Without CASA’s and other conscientious non-profits’ perspectives on a $15 minimum wage, we question how exactly employers were chosen to participate and whether that decision was slanted to produce negative results.”