In January Montgomery County Executive Isiah Leggett vetoed a bill that would raise the minimum wage in the Maryland county to $15. At the same time, he also commissioned a study on the impact of raising the minimum wage. Tuesday, PFM, the Philadelphia-based consulting group hired to investigate, turned in their report. The Washington Post’s editorial board described the results this way:
According to the 146-page report by Philadelphia-based consulting group PFM, the proposed higher wage would indeed yield benefits for low-wage workers who received it, in the form of reduced stress, greater food security and better mental health. Employers, in turn, could benefit from their workers’ improved morale, in the form of higher productivity. However, there would be offsetting costs and they could be substantial: a loss of almost 47,000 jobs and $396.5 million in total income by 2022, due to workers’ being priced out of the job market by the higher minimum wage. This would spell a reduction of nearly $41 million in expected county tax revenue between fiscal 2018 and fiscal 2022; meanwhile, the county government’s payroll costs would go up $10 million.
In other words, the wage hike would be good for people who receive it and bad for the thousands of people who would be fired as a result of it. It would also be financially bad for the country, which would see payroll go up and tax revenue go down. The survey also found that 21% of employers said they would be “very likely” to move out of the county if the hike went through:
But the results are already being dismissed because the study relied on asking employers how they would respond if the minimum wage went up. From the Washington Post:
Proponents of raising the wage questioned the value of the study, conducted by the Philadelphia-based economic consulting group PFM, since it asked employers to predict what would happen instead of looking at the impact of an actual wage hike…
Elrich — one of three council incumbents running to succeed Leggett, who will retire after 2018 — said last week that the PFM study was “nonsense” because it is not possible to project the future impact of a wage increase. He said asking employers about the potential effect of a wage increase was certain to produce negative responses.
A recent study looking at the actual impact of minimum wage hikes in Seattle found low-income jobs and work hours were lost after the city raised the wage to $13. Seattle’s Mayor and a socialist City Councilwoman worked to undermine that study by commissioning one more to their liking and making sure it was released first.