Howard County Maryland Blog

Local Politics and Current Events

Living Wages in Howard County

Posted by David Keelan on Thursday, June 21, 2007

Who is against providing someone a living wage raise their hand.  I don’t think we would have any takers.  I have some questions about Calvin Ball’s proposed legislation to help families afford to live in Howard County.  First it is the wrong approach and akin to putting the cart before the horse.

From the Howard County Times

Bill pushes ‘living wage’ for contract employees

Howard County Council Chairman Calvin Ball will file legislation this week to require many county contractors to pay a “living wage” to their employees that would be the highest of any jurisdiction in Maryland.

The bill would require contractors who do business with the county government to pay employees an hourly wage that would allow them, in a 40-hour week, to make 125 percent of the federal poverty level guideline for a family of four. This year, that would amount to about $12.41 per hour, said Ball, a Columbia Democrat.

From the Baltimore Examiner

Howard County councilman pushes living wage bill

Howard County Council Chairman Calvin Ball is taking steps to require county contractors to pay its workers a sufficient minimum wage — a move he calls “the right to do.”

“We should set a higher standard,” said Ball, D-District 2.

He plans to file legislation this week that would require contractors to pay employees at least 125 percent of the federal poverty line, which is about $12.41 an hour.

Granted that Calvin Ball probably had a lot more to say to the reporter (Sara Michael) than what is printed in the Examiner I am troubled by this statement.

Ball said he wasn’t aware of “many complaints” about contractor wages, but “part of our responsibility as government is to do the right thing, whether it’s 200 or 2,000 people who have indicated concern.”

Ball said the legislation would allow the county to better collect information about contractors and workers.

“There weren’t a lot of numbers I could look at and see what is going to be the exact impact,” he said.

Isn’t that the logic he used against the senior property tax cut?

More data should be found on the tax cut’s long-term impact, said Council Member Calvin Ball, D-District 2, at Tuesday’s council meeting.

Council Member Kenneth Ulman, D-District 4, said he was determined to pass the bill by the end of the month.

He said he would work with the commission to make any changes, and the three-week delay would not affect seniors’ ability to take advantage of a break next tax cycle.

I am sure the arguement will be that he still voted in favor of the tax cut in its original form, but that really isn’t the point here.  He wanted more data – but here he doesn’t apply the same standard (according to the articles).

As to whether Howard County needs this legislation when the General Assembly already passed a living wage bill this year is another question all together.  I don’t think this is going to make Howard County a more affordable place to live and help people buy a home here.  Based on full-time employment this would pay a person $25,812.80 per year less taxes. 

The legislation comes amid debate on how to tackle what advocates call an affordable housing “crisis.” The median cost of a single-family detached house in Howard in 2005 was $505,128, according to the county.

Howard County imports it’s work force and I am talking about non-governmental employers.  Is this really going to attract them to live in Howard County or just work here?  That means the increased tax revnues are only going to another jurisdiction.

There are better options to making Howard County a more affordable place to live and that starts with housing.  Increase someone’s pay to $25,800 so they can buy what?  So they can buy a $505,000 house?  If a person at this income level is willing to take on an aggressive mortgage they could afford an $80,000 house.  If they have two incomes then they could afford a $160,000 house.  I am not including other household expenses in that equation either so it is likely the target audience would not be able to afford a house in those price ranges either.  How many houses in that price range exist in Howard County?  A search at realtor.com for Columbia showed 11 houses in that price range.  An expanded search for all of Howard County showed 13 properties.  We have demand but no supply.

Fix the supply problem first.  Put the horse in front of the cart.

In any event, the new wage will be paid for by Howard County Government (you and me).  It is a government subsidy and a wealth redistribution program and I say that in part based upon the exclusions proposed in the legislation

Contractors with four or fewer employees, nonprofit organizations and public utility contractors under cooperative agreements with another government or organization would be exempt from the law.

Are nonprofits special?  Does this mean that a public utility contractor doing business with the State only has to pay the State rate of $11.30 per hour?  Why aren’t they as valuable of a work force?

Yes, it will increase the cost of Government – but we don’t have the data to know how much.  The next quote I would like to read from Chairman Ball would be this:

More data should be found on the wage increases’ long-term impact on County budgets and housing affordability, said Council Member Calvin Ball, D-District 2, at Tuesday’s council meeting.

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21 Responses to “Living Wages in Howard County”

  1. Freemarket said

    Calvin Ball has demonstrated that he does not understand fundamental economic concepts. Everyone knows that when you raise the price of something (be it labor, bread or anything else for that matter) people purchase less of that good. Ball’s plan will do one of two things: 1. Cause unemployment or 2. Raise the price that contractors charge the County.

    To maximize their profits, firms produce output until the marginal revenue of the output equals the marginal cost of producing that output. What this means is that raising the minimum wage that county contractors are allowed to pay their employees will simply cause those contractors to hire fewer employees or force the county to pay more for the services that the contractors provide.

    If Mr. Ball truly believes that raising the wage will increase prosperity, why doesn’t he just raise the minimum wage that county contractors can pay to $100 an hour? What the hell, why doesn’t he just require the contractors to buy their employees houses?

  2. I was trying to be PC. But you are right.

  3. As someone who is connected to the construction industry, I can tell you it doesn’t matter one iota to a construction contractor who regularly does work with the Government what the minimum wage is set at since all they do is take that wage, add their mark up (profit and overhead), and charge the Government the total. So the higher the raw cost, the more money contractors make on the mark up since the overhead and profit are usually based on a percentage of that raw cost. I mostly do work at the Federal level and I know first hand that contractors love it when the minimum wages they are forced to pay goes up since it just adds more money to their bottom line from the increase in money they get in the profit mark up.

    The people who truly pay for the increased minimum wage are the taxpayers since every County project will now cost more. In addition, the number of projects a Government can perform decreases unless the County raises taxes to cover the increased costs. And if the County is doing less projects, that means less jobs overall for the construction industry. Again, hurting the very people that this bill is advertised as “helping”.

    But I guess it makes people feel better….

    I should add, there is a union versus non-union aspect to this entire debate as well, but that is a can of worms I am not going to open at this time.

  4. somebody said

    The living wage law would only apply to employees who provide direct services to the County, for example, custodians. It will not cover construction contracts because in that case, the County is buying a structure, not services. It will affect relatively few people. PG, Montgomery, and Baltimore City all have living wage laws that have had just about no effect.

  5. cindy vaillancourt said

    The perfect legislation — it “sounds” like a big deal, but in the end only effects a very few people and won’t actually accomplish the stated goal.

    cv

  6. SallySells said

    Calvin’s bill will just mean that Howard County no longer uses contractors to do work and save money – the days of big Government are back in Howard County and Calvin is part of the “How many new employees can we hire and overpay” race with Ken – Hope everyone is expecting the massive tax increase that is coming…..

  7. Freemarket said

    SallySells- why are you dragging Ken Ulman into this? He has nothing to do with the legislation.

    More importantly, your assertion that Howard County employees are overpaid is laughable. Heck, the County Executive himself is barely breaking $150K. Are you naïve enough to think that a private company with a budget the size of Howard County’s could hire a CEO for $150K? Who else is overpaid? The guys plowing snow making $40K a year? The police and firefighters who can’t afford to live here? Nice try, sweetheart, but your rhetoric doesn’t fly.

  8. somebody said

    SallySells – what is the basis for your assertion that this bill will end the use of contractors? There’s nothing in the bill that would do this and it’s not been the experience of the other jurisdictions with similar laws.

  9. pzguru said

    Freemarket – I agree 100% with your first comment. However, I want to address part of your response to SallySells. First, the C.E. gets more than just the 150k paycheck – there are plenty of perks, and the power of the job – that make it a pretty nice job to have. As for the guys who plow snow for 40K a year, or the firefighters and police who can’t afford to live in Howard County – this is a common misconception by the public. The guys plowing snow – who bust their butts, no doubt about it – generally make well over that amount when you account for overtime pay. And, police and firefighters make very nice salaries too – again, factor in all the overtime and double time pay, plus most of them moonlight on the side – so they should hardly be considered charity cases.

  10. Freemarket said

    PZGURU, I never implied that the County employees were at “charity case” pay levels. SallySells was making a case that County employees are overpaid. In fact, he or she was suggesting that Ball and Ulman were having a contest to see who could pay County employees more, which is a totally ridiculous notion. Are you disagreeing, PZ, that County employees are fairly compensated?

    As for your stab at Ulman, a private company the size of the Howard County Government would likely have a CEO that makes over $500K a year, so the County Executive would have to be receiving a tremendous amount of perks and “power of the job” (whatever that means) to come anywhere close to that. Why else do you think the CE election came down to two guys in their thirties (OK, and Wallis too)?

  11. As to the CE position. Though the pay and perks may not be at par with a CEO who has similiar responsibilities the advantages of a person in a CE position (especially considering Ulman’s age) are many. Any CE in the State is considered a likely future Governor (granted some more than others). Ulman has a very good career ahead of him (provided he does a good job and keeps his nose clean).

    With that said, I don’t think PZ was taking a stab at Ulman I think he/she was pointing out it is a nice job, pays about the average in HoCo, and he will have many options open to him in the future.

    Good point about the overtime pay – possibly the point of The Examiner’s PIA request??? I will have to go back and look. However, I doubt that every employee gets overtime pay.

    It still comes down to this (and I think we all agree). We need affordable housing first…

  12. To PZGURU said

    Check the salaries again, PZ. Those county folks plowing snow don’t make what you think. Median/average income for Motor Equipment Operators (the guys plowing) is only $42k and average overtime pay is only $3k for the year. Not quite rolling in dough and hardly qualifies as making “well over the amount” of their base salaries.

  13. somebody said

    well, if you want to talk about potential for abuse, have a look at:

    http://howardcountymd.gov/CountyCouncil/CCdocs/CB55-2007.pdf

  14. pzguru said

    Freemarket – First, I wasn’t “taking a stab” at Ulman. What gave you that impression? Do you always think commenters are out to get Ulman? I wish I were making 150K a year. The “power” I was refering to is just that, political power. He controls the policy direction of the County. And, as David aptly pointed out, that power could be a platform for other higher offices. Do you not think there is a certain element of power to the CE position?

    Maybe the median is only 42K – but there are certainly veteran workers who earn more than that. Generally, I think that County workers are adequately paid, with excellent benefits (health, vacation/sick leave, pensions). I certainly wouldn’t say that they are overpaid as SallySells was indicating.

  15. Ulman is Overpaid said

    without getting into his resume again, Ulman is clearly overpaid. I know very few people his age who earn the amount of money he does, plus a car and the other nice benefits. Won’t he get a pension for life? Pretty sweet for a 32-year old who was writing wills before he got elected. Comparing CE with a CEO is unfair, as Ulman would never get a comparable CEO job with his experience.

    Ulman didn’t run because of the money. His family is not lacking there by any stretch. Although CE is the highest paying job he has had (out of +/- 10 jobs already?)

    Remember that the CE salary was under $100,000 and it was raised. We should raise the CE salary again to get somebody more qualified to run next time around. Why would somebody with an established career sacrifice it for a 4-year gig as CE? Instead, we are left with an amateur.

  16. Matt said

    Personally I think Executive Ulman is adequatly paid. It’s public service. People do not run for office to get rich. So to compare a private sector CEO to the CE position is like comparing apple to oranges.

    As for the county employees being over paid I have to disagree. Howard County employees are under paid. Their salaries are essentially flat. Meaning there are no merit increases just those for the cost of living. Employees will earn an increase on their anniversary date but it so minimal that it goes unnoticed. Earlier this month county employees earned a 3% cost of living adjustment. It was no increase because if it were an increase their salaries would reflect more than just the cost of living.

    These are the cost of living scale adjustments since 1999. Take note that in 2003 the county employees got nothing.

    1999 2%
    2000 3.4%
    2001 3.6
    2002 3.8
    2003 0
    2004 2
    2006 4
    2007 3
    2008 3

    Howard and Montgomery County are two of the richest counties in the nation based on median income. Montgomery County employees will see a cost of living increase of 4% on July 9st of this year and an additional 3.5% merit raise. This is just one example of how one county demonstrates the value of municipal employees while the other leaves their employees behind.

    Someone mentioned the benefits. Yes the benefits are good but it’s not fair across the board. General employees are at the mercy of the CE and County Council. They have no bargaining power, union or staff senate to negotiate on their behalf.

    The most important thing for the County to remember is that it cannot expect to get anything done without a trusting workforce to back it. With that in mind, perhaps it’s time the County considered it’s employees their #1 project.

  17. Keep Up the Good Work said

    Ulman IS overpaid. At his age and (in)experience, he could not earn that much money in the private sector.

    If I read through the fluff correctly, his resume says hasn’t worked in the private sector, except for the one time at his father’s firm. He made less at every job he has had until now.

    Plus, isn’t there a lifetime pension?

  18. Matt said

    Take Ulman out of the equation and answer how is the executive position itself overpaid?

    Now put Ulman back into the equation. The citizens of Howard County voted for him. The time he spent on the campaign trail was an interview process. It was up to the citizens of Howard Co. to decide whether or not he had the resume to lead the county. His age has nothing to do with it. That is nothing but a lame excuse and copout for a candidate you apparently do not like. The bottom line is the voters decided.

  19. Keep Up the Good Work said

    I guess we’ll agree to disagree. The Boeing CEO gets paid millions. If I were to become the CEO, I would not deserve millions and would, thus, be overpaid.

    Just because he was elected, doesn’t make him appropriately compensated.

    I actually think they should RAISE the salary of the job, so someone with some ACTUAL experience and qualifications will be tempted to run for office.

  20. Matt said

    You really don’t make any sense by comparing a CEO position to an elected political position. If you feel that Ulman is undeserving than maybe you should of tried harder to get your person elected. Bottom line is Ulman was elected by the citizens not shareholders or a group of rich white males sitting in a board room. The majority of Howard County citizens believed he was qualified. There are numerous leaders who I believe do not deserve the office for which they were elected but I don’t sit around whining about it. I wait until the next election cycle and work harder for the person I feel will better serve the constituents. Like I said before people do not run for office to get rich and if they do perhaps they should reevaluate why they’re running. Raising the salary of the CE position will not draw better candidates with good intentions.

  21. a group of rich white males sitting in a board room

    That is a rathe undidactic view of the world.

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