Baltimore Families Can’t Make Ends Meet on Minimum Wage
Hard-working families in Baltimore and across Maryland struggle to pay their bills because they aren’t paid enough to cover their basic needs. Many are forced to rely on public assistance to put food on the table or to pay their utility bills. In fact 56 percent of public assistance recipients in Maryland are in households in which at least one member works. In other words, the state and federal government have to subsidize low-wage employers. The state alone spends more than $1 billion annually providing health care and cash assistance to working families.
Raising the minimum wage would change that. Still, opponents of that common-sense policy claim a dramatic increase would result in companies hiring far fewer workers, causing greater unemployment and resulting in the government subsidizing even more people. That’s just not the case, a growing body of credible research finds.
In a letter to President Obama and congressional leaders urging a minimum wage increase, more than 600 economists, including seven Nobel Prize winners, wrote that recent research shows that “increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market” Rather, they wrote, it could stimulate the economy as low-wage workers spend their additional earnings.
In Baltimore City, nearly 26 percent of residents received food assistance at some point last year and more than 30,000 residents relied on public cash assistance income, receiving an average of $3,462 per person in 2014, according to the Census Bureau’s latest official data on poverty and income. Providing benefits to impoverished Baltimoreans cost the government more than $102 million last year. Many of the recipients would no longer need assistance if they were paid adequate wages, and the state could use those savings for education and other important services.
This past July 1, Maryland’s minimum wage increased to $8.25 an hour from $8.00. However, residents in Baltimore City continue to struggle—almost 1 out of every 4 (23.5 percent) households falls below the federal poverty line of $11,770 for a single person and $15,930 for a family of two. And, one of every three Maryland children grows up in poverty. That’s far below what it really takes to make ends meet, let alone build a future. A person residing in Baltimore City who has no children needs at least $33,994 a year to afford decent housing, food, transportation, health care, taxes and other necessities, according to the Economic Policy Institute’s Family Budget Calculator. A single parent with one child, the most common type of household in Baltimore City, needs at least $59,134 to afford a basic standard of living. More than half (54.9 percent) of all households in Baltimore City are headed by women with children under the age of 18, many of whom rely on public assistance and survive on low-wage jobs.
In Baltimore City, a total of 34,121 people live below the poverty line. Of that number, 6,162 work full time year round. They would get an 81.1 percent wage increase if the minimum wage were raised to $15 per hour, or more than $31,000 per year. A minimum wage increase of this magnitude would promote growth and stimulate the economy.
By boosting the purchasing power of low-income workers’ paychecks, raising the minimum wage generates new consumer spending and supports modest levels of job growth as businesses expand to meet increased customer demand. Some of the nearly 28,000 part-time and seasonal workers would get the chance to work full time.
A minimum wage increase to $15 per hour would also have a profound impact on the economic status of minority workers. In Baltimore City, African Americans are nearly twice as likely to live below the poverty line than whites, and are more likely to work in low-paying jobs, such as food preparation, healthcare support, and personal care services. These are the most common occupations for African American men and second most common for women living in Baltimore City.
Our success as a state depends on opportunity for everyone, and when jobs pay too little it puts opportunity out of reach for too many hard-working Baltimore residents. A raise for minimum wage workers will put more money in more families’ pockets, which they will spend locally on a variety of goods and services—promoting economic growth throughout the state.
