In the 1980s, when my teens wanted spending money of their own, they found jobs after school and in the summers. They worked in our town in pizza shops, the local movie theater, vegetable stands, and as lifeguards. Minimum wage in those days was under $5 an hour.
Once working, they were expected to put half of each paycheck into savings. They were then free to do what they wanted with the remaining money. We co-signed checking accounts for them and later co-signed for a credit card with a low limit, on which it was expected they pay anything charged. With low-paying jobs, our teens learned the basics of money management and the expectations of employers. They gained some monetary independence.
No one in the 1980s could raise a family on the $5 minimum wage. Nor can minimum wage support a family today, not even the new minimum wage of $15 mandated this year in the state of Maryland.
Interestingly, the most passionate opposition to the Maryland minimum wage law came from the poorest parts of the state. Larger, affluent counties with the highest-paying jobs, most above the new minimum wage to begin with, were not interested in the needs of other parts of the state. There is little concern in affluent counties for loss of jobs, nor were they interested in allowing poorer counties to make decisions based on their own needs.
A business in far Western Maryland, barely making ends meet, has only a few ways to comply with salary increase demanded by the state:
- Increase prices, which, on aggregate, will ultimately cut into workers’ paychecks;
- Cut employee hours which means a loss of pay for workers;
- Get by with fewer workers, which means a loss of jobs;
- Move the business to a nearby state, which entails a loss of local jobs; or
- Close the business.
Montgomery County increased the minimum wage before the state did. This year, the minimum hourly wage requirement is $12, and it will be going to $15 by 2024. A friend who has a store in a nearby county told me she has a small staff who work in her shop. Her workers all love what they do and are working to bring extra money into their households. Last summer, before the state passed the law, my friend said if the state minimum wage increases and she has to pay the mandated wage, she would have to close her shop.
The new minimum wage in Montgomery County is already eliminating low-paying jobs. In the small town where I live, we’ve had three fast food restaurants for over 30 years. As the minimum wage increased, two closed this past year. That is probably a loss of 30 or more jobs in our small town. While minimum wage laws do not require anyone under 19 to be paid the new mandated wage, a workplace that is open all day must rely on workers who are not in high school. The closing of a restaurant site takes those jobs away entirely and ensures there are a fewer jobs for teens too, some of whom might learn money management skills like my teens did. Then again, some teens may actually need the work to augment family income, and now they won’t have it.
For the most part, Montgomery County jobs pay better than those in the rest of the state. So while there may not be a significant loss of jobs here, many service jobs will suffer, meaning fewer services available, longer wait times, more self-service, ordering food through kiosks rather than from a counter clerk, inconveniences for some of us but severe losses for the people who no longer have those service jobs.
Wouldn’t more progress be made if state lawmakers could find ways to bring better-paying jobs to depressed areas of the state? It seems like a better approach than passing laws which, on the surface, may feel good, but for which there are many unintended consequences that harm those they say they are trying to help.
Patricia Fenati is a resident of Montgomery County, Md.