Leggett’s Bespoke “Survey” Report on $15 Wage is Fraying Fast

The consultant study that MoCo executive Ike Leggett commissioned on a $15 minimum wage – and that served his purpose with a maxi-alarmist conclusion about huge job losses (according to the employers who were surveyed) – is looking flimsier and flimsier. The $149,000 taxpayer-funded study – derided by the respected Economic Policy Institute as “absurd junk science” – looks headed to the junkyard as Leggett is backing away from the study’s conclusion that over 8 percent of all county jobs and huge amounts of income would be lost if the minimum wage were raised to $15 per hour.

/PM BlogSpace Report/ The consultant study that MoCo executive Ike Leggett commissioned on a $15 minimum wage – and that served his purpose with a maxi-alarmist conclusion about huge job losses (according to the employers who were surveyed) – is looking flimsier and flimsier.

The $149,000 taxpayer-funded study – derided by the respected Economic Policy Institute as “absurd junk science” – looks headed to the junkyard as Leggett is backing away from the study’s conclusion that over 8 percent of all county jobs and huge amounts of income would be lost if the minimum wage were raised to $15 per hour.

Progressive Maryland and allied organizations have waged a “Fight for $15” statewide and the Montgomery Council passed such a measure in late 2016 in its previous legislative term. But Leggett vetoed the Council-passed $15 minimum wage with a phase-in of several years, claiming he wanted to wait for the results of the survey.

In fact, as reported by Seventh State blogger Adam Pagnucco and amplified by Bethesda Beat, senior staffers in the county’s budget department were already raising red flags about the survey by consultant firm PFM nearly a month before the survey was officially released.

PFM has done several consultant reports for Leggett’s administration, as comments on the Bethesda Beat article indicate, some of which have been scored for essentially telling the exec what he wanted to hear – a common problem in bespoke social science when public money is being directed toward desired policy outcomes.

PFM surveyed employers about how they would react to a $15 minimum wage and reported based on those findings that the county would lose 47,000 jobs by 2022 and suffer an “aggregate loss of income of $400 million,” as summarized by Bethesda Beat.

When the PFM study was released Aug. 1, concerns over its methodology were immediate and widespread. Justin Vest, lead statewide organizer for Progressive Maryland, wrote 

“The Montgomery County Council should ignore this fatally flawed study and raise the wage floor to $15 for all workers in the County, without exempting young or tipped workers or expanding carve-outs for small businesses. The costs of living in the County, which rival those of New York City and Seattle, make it imperative that the Council approves a $15 minimum wage. The benefits of this policy will not be limited to boosting pay for struggling workers. Local businesses and the County as a whole will also gain from an increase in consumer spending and a more dynamic economy, which will result from a $15 minimum wage.”

In fact, an email dated July 7 from Robert Hagedoorn, chief of the county’s Division of Fiscal Management, to PFM thought that a loss of what amounted to 8.5 percent of all county jobs in this scenario seemed “very steep” to him. He asked Randall Bauer, of PFM, to review the methodology in the draft study. Pagnucco published the email in full.

The Council, stung by Leggett’s veto of the $15 minimum wage, is ready to push back. Bethesda Beat’s Andrew Metcalf reported “The authors [PFM] are scheduled to face questions from council members about the report at a briefing scheduled for Sept. 19. Already, council members have prepared and sent to PFM a comprehensive list of questions related to the report’s methodology.”

It will be interesting to see who calls in sick Sept. 19.

Blogger Pagnucco, who broke the story, reported that most recently

 “Leggett asked in a letter [Aug. 15] to the study’s authors that they review the methodology and findings in their report.  He also revealed that his administration had ‘received word from your firm that there might be a problem with the methodology and calculation of fiscal impact and resulting job impacts.  You have indicated that the job losses might be less than what is expressed in the report.’ ”

Bethesda Beat, like Pagnucco, published a copy of Leggett’s letter and followed up with the minimum wage bill’s Council sponsor.

“Montgomery County Council member Marc Elrich said Tuesday afternoon that the study cannot be salvaged.

" 'There’s nothing they can fix in that study,’ Elrich said. ‘There’s no way to fix the survey. To me, it’s totally unredeemable.’

"Elrich introduced amended legislation in July that would incrementally raise the minimum wage to $15 per hour by 2020 for larger businesses and by 2022 for smaller businesses. The current minimum wage is $11.50 per hour,” Bethesda Beat recounted.