Maryland’s New Living Wage Will Result in Job Loss

  • Publication Date: September 2007

  • Topics: Living Wage

Maryland’s New Living Wage Will Result in Job Loss

WASHINGTON – This Monday a higher living wage for Maryland workers on state contracts goes into effect; this increase will likely result in job loss for the very people it’s supporters purport to help.

“Research shows that drastic negative economic consequences come from mandated wage levels,” said the Employment Policies Institute’s chief economist Jill Jenkins. “Maryland legislators’ good intentions do not change the fact that living wages result in job loss, particularly among the less skilled and less educated.”

The new living wage law requires workers on state contracts worth $100,000 or more to be paid at least $11.30 per hour in certain parts of the state, and at least $8.50 per hour in other parts.

Research shows that by requiring employers to pay a higher wage for positions once considered entry-level, living wages attract higher skilled employees to jobs. In turn, lower skilled employees and applicants find it more difficult to hold jobs or get hired. A study from Georgetown and Johns Hopkins Universities found that living wages are targeted to assist poor households. but the Earned Income Tax Credit is about four times more effective at assisting those poor families.

“Maryland’s living wage is a wildly ineffective way to combat poverty,” Jenkins continued. “Maryland should be expanding the Earned Income Tax Credit rather than risking hardworking Marylanders jobs with this type of misguided reform.”

The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding entry-level employment. For additional information or to schedule an interview with a spokesperson, call Tim Miller at 202.463.7650.