Proposed Minimum Wage Increase Draws Mixed Reactions

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Posted on November 19, 2013

Councilmember Marc Elrich has proposed a bill that would increase the minimum wage in Montgomery County over a three-year period.
1“Maryland’s minimum wage at $7.25 per hour is the equivalent of $15,000 a year for a full-time, year-round employee, and that leaves a wage earner and their family below the federal poverty line,” said Councilmember Elrich. “We are not talking about people who are trying to take advantage of the system—we are talking about people who just want to take care of their families as a result of the hard work they do, and at the current minimum wage, that is not possible. Bill 27-13 will also provide credit for an employer who provides health insurance to the employee.

Many Asian American business owners voiced concerns about the minimum wage increase: “I think that [raising the minimum wage] will affect businesses like us a lot, because we don’t have a very good profit margin. If labor costs increase a lot, that will have a big negative effect on businesses like us,” said David Lee, from the Accounting Department of Great Wall Supermarket in Rockville, Md.
A manager of a small family owned restaurant in Washington D.C., who requested to remain anonymous, also stated her concern that raising the minimum wage along the currently proposed guidelines would destroy their profit margins alongside inflation, which has raised due to the costs of raw materials. For example, she said the price of shrimp has doubled in cost, forcing the restaurant to charge their customers so much for a simple plate of shrimp-fried rice that they complain. ”In our small business, we don’t make that much money,” she said. “If everything starts to raise in price, and we have to pay more to the [workers], then that will be more [costs] than income.”
She was not opposed to the idea of raising wages, but pointed out that raises should be given as incentive for good work. Raising the minimum wage would not necessarily result in more efficient labor. “Maybe we can start at 8.25,” she said, “If they work better, we still raise a dollar, but if we start at 11.50…it will have a big impact.” Her conclusion? “[Some] small businesses will collapse.”

On the worker’s side however, the minimum wage is being whole heartedly supported. Gregory Cendana, Executive Director of the Asian Pacific American Labor Alliance, AFL-CIO, and co-chair of the Asian American and Pacific Islander Democratic Caucus in D.C., strongly supports the proposed hike in minimum wages. “It’s very clear that Americans are working harder and harder and for less,” he said. “Right now, just looking at the overall federal min wage of over 7 dollars per hour, that’s just 20,000 a year. That’s not enough to live on, whether you’re a parent supporting a family, or a senior whose savings were lost through the financial meltdown. To [the Asian Pacific American Labor Alliance, AFL-CIO] and for me, Americans should be paid enough to live off their wages, and it’s just too low in this day and age. We’re supportive of an increase to the minimum wage.”

When asked about the concerns that some businesses have regarding the inability to continue hiring employees when required to pay more per hour for labor, he pointed out that there are studies showing that an increase in wage requirements are not necessarily negative for business. “First, I’ll say that many studies have found that increases in the minimum wage do not harm small businesses,” he said, citing work from the Center for American Progress and The Fiscal Policy Institute. He added that in states where the minimum wages are set higher than the national federal wage, which includes D.C., indicators of economic performance were better than where the minimum wages are lower. “Also, there have been reports from CEPR (Center for Economic and Policy Research), showing that minimum wage increases [lead to an] increase hiring; it doesn’t kill jobs.”

While a single extra dollar an hour may not seem like much, Cendana said that this will make a large impact on many people. He said that Asian and Asian American workers are employed heavily in particular fields, “the health industry for women and for men, the restaurant and bar industry…especially for those in the restaurant and bar industry, those workers say even a dollar extra in their hourly wage, would mean [a world of] difference.”
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