By Lorraine Mirabella
The Baltimore Sun, April 10, 2011

Bridget Highkin works as hard now as she did two years ago. But then she brought home $800 a week from her waitressing job and today she's lucky to clear $300.

For now — until she completes a part-time nursing program and can find a job as a nurse — financial relief for her family hinges on a proposal to increase Maryland's hourly minimum wage from $7.25 to $9.75 over three years. A few more dollars an hour would allow her to stop receiving assistance for day care and food, Highkin says.

"I live just under paycheck to paycheck," said Highkin, 25, who works at a Cracker Barrel restaurant in Bel Air and is a single mother of two. "At the end of each week, I'm scraping together my last pennies in hopes that the next week I can do it again."

Proponents of the minimum wage increase see momentum growing in its favor. Though proposed legislation has gone nowhere in the General Assembly session that ends Monday, backers say they have built support for another try next year.

They also say low wages are dragging down not only individuals and their families but the broader economic recovery.

"Giving raises to the lowest wage earners … is a critical part of the economic recovery," said Jen Kern, minimum wage campaign coordinator for the National Employment Law Project in Washington. "It doesn't cost taxpayers anything. We're saying to the private sector: 'You've got to pull your weight here. You're 40 years behind.' "

The proposal's supporters say the value of the minimum wage has eroded — it would need to be $10.04 in today's dollars to be equivalent to the state's rate peak in 1968 — and has contributed to the widening gulf between the rich and poor.

"We're seeing the deterioration of the middle class," said state Sen. Robert J. Garagiola, lead sponsor of a Senate bill to increase the minimum wage. "Raising the [minimum] to what it was in real terms several decades ago can reduce that disparity and put money into people's pockets, and that money goes back into the economy."

The Maryland proposal would not only increase the minimum wage, now equal to about $15,000 a year, but would index it to inflation and increase the minimum wage for tipped employees, who now earn an hourly cash wage of $3.63 per hour, or 50 percent of the minimum.

Groups such as the Maryland Chamber of Commerce and the Restaurant Association of Maryland have lined up against the proposal, saying it would drive up employer costs, force businesses to lay off workers and result in higher prices for consumers. And many legislators say they are leery of raising costs for employers just emerging from a recession.

"You have to question, with so many businesses out of business and so many businesses struggling, whether this is the appropriate time" for an increase, said Sen. Thomas M. Middleton, chair of the Finance Committee, which heard the bill last month. "I don't think it is."

Middleton, who said he does not plan to move the bill, said he believes entry-level workers are struggling but fears increasing wages could cause unemployment to spike across the state.

Likewise, Jeff Owens, chief financial officer for Clyde's Restaurant Group and chair of the state restaurant association, argues that wages for tipped employees should not be part of the minimum wage debate. Under the proposal, tipped employees would earn a base wage that is 75 percent of the minimum wage, rather than the current 50 percent.

"To practically double the cash wage, you're turning the financial model for a restaurant upside down," Owens said. "To all of a sudden double wages would require drastic measures" that could range from menu price increases to limiting full service, he added.

The state chamber of commerce warns of additional consequences: businesses being forced to send more jobs overseas or having to cut the number of part-time workers and unskilled laborers. "Many employees may have their hours reduced," a chamber position paper says. "Others may lose their jobs, and still others will not be hired."

Advocates of a higher minimum wage say mounting evidence refutes such arguments — and they are pushing to get their message out. Progressive Maryland, a nonprofit group that lobbies for working families and has acted as the lead advocate for bills introduced in the Senate and House of Delegates, has mobilized support from dozens of small businesses [NOTE: this is an incorrect reference to business support organized by Business for Shared Prosperity/Business for a Fair Minimum Wage. See http://www.businessforafairminimumwage.org/Maryland-Minimum-Wage-Statem… ] and launched a petition drive in Middleton's Charles County district. The group is planning town hall meetings this spring and summer in Charles and Baltimore counties.

"This is a major reform, and it does take multiple years," said Rion Dennis, Progressive Maryland's executive director. "We want to make sure we have all the grassroots support so … next year will be the year that Maryland will see its minimum wage increase."

Continued Dennis: "We're steadily making the case that the economy is rebounding for big companies. Raising the minimum wage is what you do in a jobless recovery like this. Prices are going up and the cost of living is going up, and people's raises haven't been meeting it. That's what's missing in this economy."

Seventeen states and Washington, D.C., have minimum wages higher than Maryland's, which, at $7.25 an hour, is the same as the federal minimum, said Kern of the National Employment Law Project.

Most recent economic studies show no negative impacts of minimum wage increases on jobs, said Robert Lynch, chair of the economics department at Washington College in Chestertown.

"Today economists generally agree that at current levels of minimum wage, if you raise the minimum wage it's not going to have a negative job impact," Lynch said.

In fact, Lynch said, the effect is positive: "The job turnover and quit rate goes down. It saves on recruiting, and [businesses] are able to retain a more experienced and better-educated work force, which increases productivity."

Using the findings of a Federal Reserve of Chicago study from 2008, Lynch estimates that an increase in Maryland's minimum wage — which would benefit some 300,000 workers, according to Progressive Maryland — would increase consumer spending by about $1 billion over three years.

Employees of auto repair shop British American Auto Care in Columbia have always been paid more than the minimum wage, owner Brian England said. Wages for his 20 workers, many of them longtime employees, range from $9 to $30 an hour. He also provides health care benefits, incentives and bonuses and raises every six months.

"You bring people along. You turn a job into a career," England said. "That's what you should be doing. We've got to move everybody up and get people as far away as possible from the social safety net."

Highkin, the Cracker Barrel waitress, lives with her mother and relies on food stamps and child and health care subsidies. Her wages barely cover her car payments, car insurance and day-care fees. She still has three more years to go to earn a RN degree.

She worries she'll have to go back to working nights and weekends, a prospect she does not relish with two young sons, 4 and 6.

"When people think waitress and bartender, they think those people make great money," she said. "But a lot have families and they struggle."

lorraine.mirabella@baltsun.com

Copyright 2011 The Baltimore Sun