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February 23, 2006

Chamber Opposes Indexing Minimum Wage

Maryland Chamber Chairman Terry Neimeyer, Chairman, President and CEO of KCI Technologies, Inc. is in town today to testify in opposition to HB 1142, Minimum Wage - Constitutional Right and Provisions. This legislation proposes an addition to the Maryland Constitution that would tie annual minimum wage increases to the rate of inflation.

The Chamber opposes this legislation because subjecting Maryland businesses to annual automatic increases in labor costs would have a negative impact on Maryland’s business environment. Wages should be set in the marketplace, not by state government. Mandating annual wage increases could lead to unexpected consequences that could force affected businesses to make difficult decisions, like raising prices, cutting jobs, or raising prices.

In addition, indexing the minimum wage ignores natural wage growth. The minimum wage is an entry level wage that allows low skilled workers to learn new job skills and climb up the job ladder. Mandating wage increases for low skilled workers will price them out of the job market.

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