Maryland Should Build on $15 Minimum Wage Victory to Reach More Workers

The subminimum wage for workers who rely on tips will remain the same, at $3.63 an hour, without further action from policymakers.

Maryland workers won a major victory this week when the General Assembly voted to raise the minimum wage to $15 for most workers by 2025, overriding Gov. Hogan’s veto. This important step forward will bring higher pay to hundreds of thousands of workers, ensure more families can afford necessities, and boost spending at local businesses. However, lawmakers weakened the bill at each step of its path through the legislature, ultimately leaving thousands of workers behind. They should act quickly next year to strengthen the law and guarantee all Marylanders a fair return on their hard work.

The sponsors of the new minimum wage law—Del. Diana Fennell and Sen. Cory McCray—introduced a strong bill at the beginning of this year’s legislative session. The original bill would have brought the minimum wage to $15 by 2023, eliminated New Deal-era carve-outs intended to exclude Black workers, and maintained the wage floor’s purchasing power in future years. Altogether, this “clean” bill free from arbitrary exclusions would have raised wages for 573,000 workers by a total of $2.6 billion per year.

That wasn’t the bill that eventually passed. Lawmakers in both the House and Senate amended the bill to extend smaller benefits to fewer workers:

• The minimum wage will now hit $15 in 2025 for most workers, while workers at companies with 14 or fewer employees will have to wait until July 2026.
• The law will continue to allow companies to pay tipped workers just $3.63 per hour, less than 25 percent of the full minimum wage.
• The law will continue to exclude farm workers, a carve-out with roots in the racist compromises of the New Deal coalition.
• The law takes away minimum wage protections from some young workers who stay at the same job for more than six months.
• The law does not include any provision to ensure the minimum wage keeps up with inflation in future years, meaning that workers will have to rely on lawmakers just to make sure the purchasing power of their wages doesn’t erode over time.

Lawmakers should act quickly when the General Assembly reconvenes next year to strengthen the minimum wage law:

• End the tipped subminimum wage: Workers who can earn tips work just as hard as anyone else, and they deserve the same basic protections. Workers in a wide range of industries can earn tips, and two out of three tipped workers are women. There is strong public support for guaranteeing a consistent minimum wage to all workers, and evidence from the District of Columbia suggests that people of color are the most likely to favor this reform.
• End other special carve-outs: Maryland should also guarantee the same protections to farm workers and young workers as everyone else. The farm worker exclusion disproportionately holds down wages for Latinx workers, who constitute a quarter of Maryland’s agricultural workforce. One in eight farm workers in Maryland has family income below the federal poverty line (about $12,500 for a single adult or $25,750 for a family of four), comparable to other low-wage industries like retail and accommodations. Meanwhile, workers under the age of 18 make important contributions to their families’ livelihoods, especially those in low-income families. Among young workers whose family income is less than the federal poverty line, nearly half bring home one-third or more of their families’ income.
• Protect workers from eroding purchasing power: This year’s minimum wage law will allow the wage floor to lose value over time as both living essentials like housing and economic stepping stones like college get more expensive. Making matters worse, because prices will continue to rise throughout the law’s delayed phase-in schedule, the minimum wage will have reduced purchasing power as soon as it reaches $15. The legislature’s action to delay the full phase-in from July 2023 to January 2025 is equivalent to a $960 annual pay cut for a full-time worker.
• Do more than the minimum: Policymakers should take steps beyond the minimum wage to ensure that economic growth translates into healthy wage growth for all Marylanders. They can start by restoring overtime protections to modestly paid salaried workers, guaranteeing predictable work hours, and strengthening enforcement of existing worker protections.