Who could be against workers earning more money? It seems like a no-brainer. That is why there is a citizen campaign to raise the minimum wage in Maryland, from $15/hour to $25. If approved, Maryland would establish the highest minimum wage in the United States, surpassing even Washington, D.C.(which currently stands at $17.95 per hour).
In this article, we explain the proposal in detail… and why it will do nothing to help the most disadvantaged. After all, the road to hell is paved with good intentions.
Maryland’s current minimum wage
Currently, and since January 2024, the minimum wage in Maryland is $15 per hour. This is due to the Fair Wage Act of 2023, which accelerated the timeline for reaching the $15 goal earlier than originally planned. However, the situation is much more complex due to local variations: some counties (such as Montgomery County) have already implemented higher rates. In Montgomery, large businesses (with 51 or more employees) must pay up to $17.65 per hour, a rate that is adjusted annually for inflation.
Jobs in which employees receive tips are also a point of contention. The base cash wage that employers are required to pay remains at just $3.63 per hour. The law requires that this base wage, plus tips, must reach a minimum of $15 per hour. If tips do not cover the difference, employers must make up the difference—a mechanism known as a “tip credit.”
The 2026 initiative
The initiative to raise the minimum wage to $25 per hour is an active political campaign by the activist group One Fair Wage. This would eliminate the reduced wage for tipped employees and young workers. Proponents of this proposal point to the economic reality of the state: $15 an hour is insufficient for a basic standard of living in Maryland, one of the most expensive areas of the Mid-Atlantic. $15 an hour is not nearly enough for a single worker to survive on.
Opponents of this measure have made us wait: the Maryland Chamber of Commerce warns that such a drastic increase is unsustainable and would damage the state’s competitiveness. When small businesses can no longer afford to pay their workers so much, they will simply lay them off and downsize their businesses… They may even close them down and move to another state.
The flight of companies and the slowdown in the creation of new jobs is a real concern; good intentions are one thing, but the real consequences of this type of legislation are quite another.
One of the biggest skeptics about minimum wage laws is economist Thomas Sowell. He is one of the first American economists to argue that the fundamental law of economics is supply and demand, not governmental legislation. The minimum wage acts as a forced floor in the labor market; if the government sets that price above a worker’s actual productivity, companies simply cannot afford to hire them. The direct consequence is a labor surplus, which translates into unemployment. This means that workers who are denied a job—because their labour is not worth the legal minimum wage—end up earning zero dollars per hour.
Mr. Sowell argues that the minimum wage hurts precisely those it is intended to help: young, inexperienced people without work experience and low-skilled workers. The law eliminates the first rung on the job ladder. An inexperienced worker’s first job offers training, work history, and skills… often at a low wage that the market can afford to pay. By prohibiting that low wage, they are denied the opportunity to gain experience that would justify higher wages in the future.
Furthermore, this rampant wage increase would place a disproportionate burden on small businesses. Unlike large corporations with substantial capital reserves, small businesses operate on much tighter profit margins and have less liquidity. Such a large jump in the minimum wage will only cause companies to flee toward job automation.
For now, we will have to see if $25 per hour proposal will come to a vote, but we know that it would not have any real beneficial economic consequences.