Is Maryland really ‘Open for Business’?

By Laura Toraldo

(March 26, 2019–ANNAPOLIS, Md.) We say Maryland is open for business, but are we living up to that statement? Business owners with operations of every size, from across the state, have come to Annapolis to add their voices in opposition to the $15 minimum wage increase—is the state listening?

Subjecting businesses to yet another increase, when just last year the minimum wage hit $10.10 per hour, in addition to costs due to compliance with the recently implemented sick and safe leave, and a reluctance to grant any real tax relief, tells a different story.

Maryland businesses have shown up during these hearings for good cause. This increase threatens their livelihoods. Business after business has the same story: a $15 minimum wage will result in cuts in employee programs, layoffs, and for some—it will force them to shut their doors or move across state lines.

The total cost impact of this single legislation on businesses is staggering. Tulkoff Food Products in Baltimore City, has 65 hourly employees with salary ranges from $11 per hour to $29 per hour and titles ranging from line worker to maintenance tech. Considering the increase across the board, Tulkoff calculated its total cost impact of the $15 minimum wage increase, if it were made today, to be $643,552 per year—a cost that they are not able to sustain.

They are far from the only ones. The Maryland Chamber represents nearly 4,500 businesses. These statements about layoffs and closing shop are not false cries—they are reality. This increase will not only require continued salary compression for those who make above the minimum wage, but would cause hour, benefit, and position reductions as a result.

We are not just speaking on behalf of business owners, but on behalf of employees throughout the state. Employees from Mobern Lighting, located in Anne Arundel County, said in their testimony, “We are ex-offenders, veterans, the homeless, those in recovery, disadvantaged youths, and those with special needs. We all presently work at Mobern.”

This increase would threaten the programing that Mobern currently has in place to support its employees through counseling, case managers, health care providers, lawyers, and more that assist in keeping its workers gainfully employed. Furthermore, it would need to cut jobs to make ends meet, further challenging the very people this bill is intended to support. Employees stated, “Most of us would struggle in our daily lives if we lose our jobs due to the unintended consequences of raising the minimum hourly wage.”

Cutting jobs is not the only consequence, many companies are threatening to leave the state all together. If Maryland’s miminimum wage increases to $15 per hour, it will be one of the highest in the country. Already well above bordering states, far too many of our members have said the solution for them is simple—move to a state where their operation can survive.

To quote Toroid President and CEO Katarina Ennerfelt, “It’s a very short-sighted solution to a bigger problem. I’ll have to take from the benefit package or somewhere else to offset an increase in minimum wage to $15. It would cause a 45 percent increase over my whole payroll. Delaware is only five miles away and Virginia is 40 miles. We have plenty of options to move our business if $15 minimum wage is passed.”

Maryland businesses are the job-creating engines our state desperately needs. Mandating that all businesses increase their wages will result in unintended consequences our state cannot afford.

We believe alternative solutions supporting education and workforce development initiatives—programs that will advance workers out of entry-level, minimum wage jobs—is where we need to focus our energy. This is the sustainable solution that will advance the State of Maryland and secure our future.