Since it’s an election year, Democratic politicians in Annapolis are eager to pass an increase in the minimum wage. Gov. Martin O’Malley is poised to promote a higher minimum wage law in Maryland as part of his incipient campaign for national office.
But is it a good idea? Will there be unintended consequences in the form of job reductions?
That could well be the case, based on a recent Texas A&M economic study. It’s also the findings of a February study by the Congressional Budget Office.
Bottom Line: A jump in the minimum wage by 10% (Maryland’s proposal is 13% in year one and a cumulative 39% over three years) will have a significant negative impact on future job hiring.
The nonpartisan CBO forecasts that a federal hike in the minimum wage from $7.25 an hour to $10.10 an hour could mean a likely loss of 500,000 jobs nationwide, although there’s a chance the job loss could hit one million.