D.C. Mayor Muriel Bowser is set to introduce legislation that would raise the minimum wage to $15 an hour despite cries that it would unduly burden city businesses and make the District less attractive to companies seeking to set up shop.
The Democratic mayor announced her proposal amid a national movement for increasing the minimum wage. California and New York hiked their hourly minimums to $15 last week, and officials in neighboring Montgomery County, Maryland, are preparing a similar measure.
Under previous legislation, the District is scheduled to raise its minimum wage from $10.50 to $11.50 an hour effective July 1.
“With the high cost of living and the expenses of everyday life, low wages create an invisible ceiling that prevents working families from getting their fair shot,” Ms. Bowser said. “In a city as prosperous as ours, we can level the playing field and make sure our residents are paid a good wage so fewer families are forced to leave.”
She first announced the legislation in her annual State of the District address March 22, saying that raising the minimum wage to $15 an hour by 2020 would give low-income residents paths to better lives. She said she would deliver her bill to the D.C. Council this week.
Council Chairman Phil Mendelson hasn’t signaled whether he would support the legislation, saying he needs to see the details.
“We have not seen the mayor’s proposal so it’s difficult to opine whether the proposal is the right approach or not,” the at-large Democrat told The Washington Times.
Margaret Singleton, interim president of the D.C. Chamber of Commerce, said the minimum wage proposal joins other initiatives by city officials that would increase costs for businesses, thereby cutting their profits, restraining their growth and blunting their ability to compete.
Taken together, the city’s paid family leave and minimum wage bills could drive businesses out of and away from the District, Ms. Singleton said.
“It’s not just one piece of legislation,” she said. “When we begin to look at the cumulative effect on business, that’s where we have our biggest concern. Collectively, there is a large burden on the business community, and there needs to be balance across the board.”
Pros and cons
Ms. Bowser said she thinks a good business climate and a higher minimum wage can coexist.
“Cities and states across the country are proving that decent wages and strong business climates are not mutually exclusive,” she said.
Delvone Michael, who heads D.C. Working Families, said workers in the District should be able to make enough money to live in the city.
“D.C. is one of the most expensive cities in the country and has one of the highest levels of income inequality,” Mr. Michael said, adding that the minimum wage in the District often doesn’t allow families to meet basic needs.
He said the working poor are forced to make choices they shouldn’t have to, such as paying rent versus buying medication or groceries.
“Think about the folks making $10 an hour. How do they survive?” Mr. Michael said. “They have to make a choice.”
It may be too early to take a long view on a $15 minimum wage since it’s been enacted in only some states and cities in recent years, but some think tanks don’t believe increasing the minimum wage will do much for low-income residents or businesses.
“It’s a very risky thing to do in Washington,” said Michael Strain, deputy director of economic policy studies at the American Enterprise Institute. “If businesses think that Washington is a bad place to do business, then jobs go away.”
Mr. Strain said the minimum wage hike would force businesses to choose between raising prices and laying off workers. Either solution, he said, trickles down to the poorest residents.
“If [businesses] can weather it, it will be at the expense of workers and prices,” he said, adding that fewer jobs wouldn’t help the District’s working poor and higher prices would be a burden on low-income residents, offsetting the pay raise.
Chris Edwards, director of tax policy studies at the libertarian Cato Institute, said in an April 8 blog post that minimum wage hikes “hurt the exact groups of people that policymakers say that they want to help.”
Mr. Edwards cited research from labor economist Joseph Sabia of San Diego State University, which said increases aren’t effective in reducing overall poverty rates or poverty rates among workers.
A study by David Neumark, an economist at the University of California, Irvine, and William Wascher, deputy director of the Federal Reserve’s Board of Governors, showed that “some poor workers who kept their jobs after minimum wage increases were lifted out of poverty, while others lost their jobs and fell into poverty.”
National and regional moves
Ms. Bowser said she is resolute in raising the minimum wage and has the support of the governors of New York and California, who recently signed legislation to raise their states’ minimum wage to $15 an hour by 2020 and 2022, respectively.
Under the California law enacted April 4, the state minimum wage would increase to $10.50 on Jan. 1 for businesses with 26 or more employees and annual increases will boost the minimum wage to $15 by 2022.
In New York, the rise in the minimum wage will start in New York City and fan out to other parts of the state.
For workers of New York City businesses with at least 11 employees, the minimum wage would rise to $11 at the end of this year, then by $2 in each of the next two years. For employees of smaller companies in the city, the minimum wage would rise to $10.50 by the end of the year, then by $1.50 each year for three years.
In 2014, Seattle and San Francisco became the first cities in the country to raise the minimum wage to $15 an hour by 2020.
Mr. Mendelson said Friday on WAMU Radio’s “The Kojo Nnamdi Show” that he would prefer a regional approach to a minimum wage increase. He noted the District’s partnership with Montgomery and Prince George’s counties in 2013 to raise their minimum wages together.
“Let’s do this regionally, not just be an island within the region,” the D.C. Council chairman said.
The Montgomery County Council soon will consider a $15-an-hour minimum wage measure. Council member Marc Elrich, at-large Democrat, said he would file the legislation. Mr. Elrich was part of the triumvirate of regional lawmakers who helped raise the minimum wage in 2013.
But if Mr. Mendelson wants a regional minimum raise increase, he will have to count Prince George’s County out this time. County Council Chairman Derrick Leon Davis, a Democrat, told The Washington Post in March that the county is “facing too many economic uncertainties to justify another increase.”
“Our realities are catching up with us right now,” Mr. Davis told The Post. “At this time, it would be imprudent to take another step in that direction.”
Ms. Bowser has not detailed how her minimum wage increase would work.
She isn’t giving up on paid family leave, either. She said she would form a task force of workers, labor and business leaders to examine the issue over the next six months.
“They are going to come together to make sure we are creating a worker- and business-friendly environment in which we maintain our regional competitiveness,” she said.
In December, the council took up legislation that would require city businesses to pay up to a 1 percent tax on their employees’ salaries to create a citywide fund that would pay for 16 weeks of paid family and medical leave for working residents. Mr. Mendelson has proposed cutting the measure to 12 weeks of paid leave.
If enacted, the District would have the most generous family leave policy in the country.
D.C. workers receive 16 weeks of unpaid family and medical leave. Other jurisdictions offer no more than six weeks of paid leave.
“From paid family leave to identifying new ways to help our residents start small businesses — the task force will present a report that recommends what we can do to stay competitive and continue to prosper,” Ms. Bowser said.