UPDATED: County Will Not Pay For Discredited Minimum Wage Study

Authors previously admitted that error in calculations overestimated potential job losses


The cover page for the study created by PFM for Montgomery County on the economic impact of the $15 minimum wage

Updated - 8:40 p.m. - Montgomery County will not pay $149,000 to a Philadelphia-based consulting and research company for a now discredited study on the local economic impact of raising the minimum wage to $15 per hour.

Patrick Lacefield, a spokesman for County Executive Ike Leggett, wrote in an email to Bethesda Beat Tuesday, “We are not paying the bill.”

The county also does not want Public Financial Management (PFM) to conduct any additional work on the problematic report, Lacefield wrote. He did not respond to email and phone messages on Tuesday and Wednesday asking for further comment.

A spokesman for PFM said Wednesday evening the firm will waive its fee for the report.

“PFM is proud to have served the county for many years," Kirk Dorn, the spokesman, wrote in an email. "In support of efforts to reach a positive resolution to the county’s minimum wage issues, we have decided to waive our fee for our work and that of our subconsultant who worked on the economic impact portion of the study.  We will continue to be as helpful as possible.”

The move comes after Council member George Leventhal publicly asked Monday during a council committee meeting whether the county could “recoup” what the firm charged the county for the report.

Leventhal said he was informed by Lacefield the county wouldn’t be paying for the study.

“I don’t think the county was going to get its money’s worth,” Leventhal said Tuesday. “I’m glad to hear we haven’t paid and we won’t pay.”

The council is considering legislation to raise the minimum wage to $15 per hour. Leggett commissioned the study after vetoing a bill that the council narrowly passed. The bill would have raised the minimum wage for many businesses in the county to $15 per hour by 2020. Leggett said he wanted to study the economic impact to the county of raising the wage to $15, so he commissioned the report.

In August, the report was widely criticized for relying heavily on surveys of business owners after it was released. Critics said business owners have a financial incentive to say that raising the wage would lead them to cut jobs, even if that wasn’t what would happen.

As backlash against the study mounted, PFM Managing Director Dean Kaplan admitted there was an error in the study—the firm used the wrong data from its surveys of business owners. He said the original estimate that 47,000 jobs in the county would be lost by 2022 if the wage were increased to $15 per hour likely would be cut in half once the error was corrected.

It was unclear this week if PFM had given the county a corrected version of its work yet, two months after the error was acknowledged.

Back to Bethesda Beat

Edit Module
Edit ModuleShow Tags

Archive »Related Articles

School Notes: County Executive, MCPS Leaders Kick-Off Suicide and Drug Abuse Prevention Campaign

Plus: Montgomery College seeks candidates for trustees board; council candidate to hold schools forum

Pepco Granted Partial Rate Increase Again; Residential Power Bills To Increase

Average customer’s bill will rise about $4 per month immediately

Planning Board Approves Adding Apartments, Five Stories to Guardian Building in Silver Spring

Officials say project is a way to reinvent struggling office complex

Political Roundup: Possible Presidential Candidate Endorses Ex-Aide in County Council Race

Plus: Potomac pediatrician announces District 6 Congressional run; Del. Carr to run for re-election
Edit ModuleShow Tags Edit Module
Edit Module
Edit ModuleShow Tags

Sponsored Content

Wireless Telecommunication Community Meeting

Join Montgomery County on Monday, October 23, in Rockville to discuss proposed zoning changes to address deployment of microtowers and small cell antennas.

Interested in Learning More About the Democratic Candidates for County Executive?

Join The Greater Bethesda Chamber of Commerce and Bethesda Beat as we host a debate featuring the Democratic Candidates for County Executive on November 15. Click to get your free tickets.
Edit ModuleShow Tags

More »

New Construction

Potomac, $1,999,999

Remodeled Colonial

Potomac, $1,075,000

Classic Chevy Chase Colonial

Chevy Chase, $1,319,000

Stunning Updated Tudor

Bethesda, $1,529,000

Transformed Colonial

North Bethesda, $1,295,000
Edit Module


Your Guides to Leading
Local Professionals

Edit Module
Edit ModuleShow Tags Edit Module

Edit Module