Fair Pay for Women and People of Color in Maryland Requires Increasing the Minimum Wage and the Tipped Minimum Wage
Minimum wage workers in Maryland – mostly women – struggle to make ends meet on earnings of just $7.25 per hour ($3.63 per hour for tipped workers). The Maryland Minimum Wage Act (SB 331/HB 295) would raise the minimum wage to $10.10 per hour by 2016, increase the minimum cash wage for tipped workers from 50 percent to 70 percent of the regular minimum wage, and index these wages to keep pace with inflation. Increasing the minimum wage and tipped minimum wage are key steps toward fair pay for women and people of color in Maryland.
Women and people of color are more likely to be paid the minimum wage.
- Women were more than six in ten Maryland workers who were paid the state minimum wage or less in 2012. They provided care for children and elders, cleaned homes and offices, and waited tables.
- Women of color are disproportionately represented among female minimum wage workers. Nationally, nearly four in ten female minimum wage workers are women of color, compared to just over one-third of all working women.
- People of color are disproportionately represented among minimum wage workers.
Nationally, four in ten minimum wage workers are people of color, compared to one-third of all
It’s time to give low-wage workers in Maryland a raise.
- A woman working full time, year round in Maryland at the current minimum wage of $7.25 per hour will earn just $14,500 annually. That’s more than $4,000 below the federal poverty line for a mother with two children. If the minimum wage had kept pace with inflation, it would now be over $10.70 per hour.
- The minimum cash wage for tipped employees in Maryland is $3.63 per hour – just $7,260 a year. While employers are responsible for making sure their tipped employees are paid the minimum wage, many are paid less due to wage theft and other illegal practices. In Maryland, women are 60 percent of tipped workers and 66 percent of restaurant servers, the state’s largest group of tipped workers.
- Maryland families are struggling in this tough economy. In 2012, 18 percent of black families with children were in poverty, 15 percent of Hispanic families with children were in poverty, and 28 percent of single-mother families were in poverty.
Raising the minimum wage and the tipped minimum wage would boost wages for working women and people of color in Maryland and help close the wage gap.
- Increasing the minimum wage to $10.10 per hour would boost annual earnings to $20,200, an increase of $5,700 per year – enough to lift a family of three out of poverty. Raising the tipped minimum cash wage to 70 percent of $10.10 per hour ($7.07 per hour) would mean an increase of $6,880 per year for full-time work, providing more stable and adequate base earnings for tipped employees. Indexing wages to inflation would prevent the minimum wage and the tipped minimum wage from falling relative to the cost of living.
- The Economic Policy Institute (EPI) estimates that if Maryland’s minimum wage were increased to $10.10 per hour by 2016, nearly half a million (455,000) workers would get a raise. Of the total affected workers, approximately 58 percent are women and 58 percent are people of color.
- Of the 455,000 workers who would get a raise, 87 percent are at least 20 years old, and nearly a quarter (23 percent) are parents. About 210,000 children in Maryland have a parent who would benefit from a minimum wage increase.
- Increasing the minimum wage would mean higher pay for thousands of Maryland women and help close the wage gap. In 2012, Maryland women working full time, year round were paid only 85 cents for every dollar paid to their male counterparts. Black women working full time, year round made only 70 cents, and Hispanic women only 45 cents, for every dollar paid to their white, non-Hispanic male counterparts.
Raising the minimum wage would strengthen Maryland’s economy.
- Increasing the wages paid to low-wage workers results in lower turnover, boosts worker efforts, and encourages employers to invest in their workers.
- Most minimum wage workers need this income to make ends meet and spend it quickly, boosting the economy. Research indicates that for every $1 added to the minimum wage, low-wage worker households spent an additional $2,800 the following year.
- Raising the minimum wage does not cause job loss, even during periods of recession. In fact, EPI estimates that raising Maryland’s minimum hourly wage to $10.10 by 2016 would generate more than $456 million in additional economic activity and create or support approximately 1,600 jobs.
 NWLC calculations based on unpublished U.S. Dep’t of Labor, Bureau of Labor Statistics (BLS) data. Figures are annual averages for 2012. Women represent 61 percent of people making the state minimum wage or less in Maryland.
 Women of color are 38.7 percent of all female minimum wage workers. NWLC calculations based on BLS, Characteristics of Minimum Wage Workers, 2012, available at http://www.bls.gov/cps/minwage2012tbls.htm [hereinafter BLS Min. Wage Characteristics] (Table 1) (last visited Feb. 7, 2014). This figure assumes 88.2 percent of Hispanics are white. See U.S. Census Bureau, 2012 Population Estimates, Annual Estimates of the Resident Population by Sex, Single Year of Age, Race, and Hispanic Origin for the United States: April 1 2010 to July 1, 2012 (for people of Hispanic origin in July 2012), http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.... [hereinafter U.S. Census Bureau, 2012 Population Estimates] (last visited Dec. 19, 2013).
 Women of color are 33.8 percent of all working women. NWLC calculations based on U.S. Census Bureau, CPS, 2013 Annual Social and Economic Supplement, Table PINC-05, http://www.census.gov/hhes/www/cpstables/032013/perinc/pinc05_000.htm [hereinafter U.S. Census Bureau, CPS Table PINC-05] (last visited Dec. 19, 2013).
 People of color are 40.1 percent of all minimum wage workers. NWLC calculations based on BLS Min. Wage Characteristics (Table 1), supra note 2. This figure assumes 88.2 percent of Hispanics are white. See U.S. Census Bureau, 2012 Population Estimates, supra note 2.
 People of color are 33.5 percent of all workers. NWLC calculations based on U.S. Census Bureau, CPS Table PINC-05, supra note 3.
 NWLC calculation assuming 40 hours per week, 50 weeks per year at $7.25 per hour.
 U.S. Census Bureau, Poverty Thresholds for 2013, https://www.census.gov/hhes/www/poverty/data/threshld/index.html (last visited Feb. 4, 2013).
 At $7.25 per hour, Maryland’s minimum wage is the same as the federal minimum wage. The high-water mark for the federal minimum wage of $1.60 in 1968 (see Doug Hall, EPI, Increasing the Minimum Wage Is Smart for Families and the Economy (May 2011), available at http://www.epi.org/publication/increasing_the_minimum_wage_is_smart_for_...) would be $10.71 in 2013 according to the U.S. Dep’t of Labor, Bureau of Labor Statistics inflation calculator, http://www.bls.gov/data/inflation_calculator.htm (last visited Feb. 3, 2014).
 NWLC calculation assuming 40 hours per week, 50 weeks per year at $3.63 per hour.
 Sylvia A. Allegretto & Kai Filion, EPI, Waiting for Change, at 3-4 (Feb. 2011), available at http://www.epi.org/page/-/BriefingPaper297.pdf.
 Steven Ruggles et al., Integrated Public Use Microdata Series: Version 5.0 [Machine-readable database]. Minneapolis: University of Minnesota, 2010. Data are from the American Community Survey 2007-2011 five-year averages; refers to employed tipped workers.
 NWLC calculations from U.S. Census Bureau, 2012 American Community Survey, http://www.census.gov/acs/www/ (Tables B17010B, B17010I, S1702). Figures are based on householder’s race or ethnicity.
 NWLC calculation assuming 40 hours per week, 50 weeks per year at $10.10 per hour.
 NWLC calculations assuming 40 hours per week, 50 weeks per year at $7.07 per hour.
 David Cooper, EPI, Raising the Maryland Minimum Wage Will Benefit Nearly Half a Million Workers and Modestly Boost the State’s Economy, at 3-4, 6 (Jan. 2014), available at http://s4.epi.org/files/2014/MD_to_1010%201_31_14.pdf.
 Id. at 5, 8.
 Under most circumstances a higher minimum wage would narrow the wage distribution, effectively narrowing the wage gap. Nicole M. Fortin & Thomas Lemieux, Institutional Changes and Rising Inequality, Journal of Economic Perspectives, Spring 1997, 75-96 at 78, available at
http://www.jstor.org/discover/10.2307/2138237?uid=2134&uid=2&uid=70&uid=... See also Francine D. Blau & Lawrence M. Kahn, Swimming Upstream, Journal of Labor Economics, Jan. 1997, 1-42 at 28, available at http://www.jstor.org/stable/2535313.
 NWLC calculations from U.S. Census Bureau, 2012 American Community Survey, http://www.census.gov/acs/www/ (Tables R2001 and R2002).
 NWLC calculations from U.S. Census Bureau, 2010-2012 American Community Survey Three-Year Estimates, http://www.census.gov/acs/www/ (Tables B20017B, B20017H, B20017I).
 T. William Lester, David Madland & Nick Bunker, Ctr. for Amer. Progress, An Increased Minimum Wage is Good Policy Even During Hard Times (June 2011), available at http://www.americanprogressaction.org/issues/2011/06/higher_minimum_wage....
 Daniel Aaronson, Sumit Agarwal & Eric French, Fed. Reserve Bank of Chicago, The Spending and Debt Responses to Minimum Wage Increases, at 10 (Revised Feb. 2011), available at http://www.chicagofed.org/digital_assets/publications/working_papers/200....
 Mary Gable & Douglas Hall, Econ. Policy Inst., The Benefits of Raising Illinois’ Minimum Wage at 2-3 (Jan. 2012), available at http://www.epi.org/files/2012/ib321.pdf.
 Cooper, supra note 15, at 3.