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Nathan Newman on April 12, 2007 - 8:16am
This week, Maryland became the first state to enact a "living wage" law, HB 430, requiring government contractors to pay their employees a decent wage, in the bill ranging from $8.50 an hour in rural areas to $11.30 an hour in areas of the state with higher costs of living. Maryland follows the 120 local governments around the country that have required that public money go to companies that pay their workers above the poverty line.
"It doesn't make them rich," said Sen. Thomas M. Middleton, chairman of the Maryland Senate Finance Committee. "We're just lifting them a little bit more out ... of poverty."
The bill exempts small businesses with fewer than 10 employees working on smaller government contracts and non-profits from the laws rules.
Some opponents of the bill complained that the living wage law will add to the state's deficit, but recent studies on jurisdictions that have enacted living wage laws (see here and here), show little if any increased costs from requiring increased wages by contractors, and such laws have often saved money given that the employees of contractors are less likely to end up using government welfare and health care services if paid above a poverty wage.
Maryland and California legislatures approved state living wage bills in past years, only to see them vetoed by their governors then, so this revival of the Maryland living wage law under a new, more progressive Governor who will sign the law is a welcome development.