- - Monday, June 13, 2016

ANALYSIS/OPINION:

Last week, the City Council in Washington, D.C. voted to raise the District’s minimum wage by 30 percent to $15. Unions and their activist allies were quick to celebrate the decision.

But a recent survey of 100 affected District businesses conducted by the Employment Policies Institute (EPI) suggests wage hike proponents shouldn’t pop the champagne just yet. EPI’s survey finds that one in three respondents are “very likely” to cut staffing levels in response to a $15 minimum wage. When you consider that most small businesses have profit margins in the low single-digits, it’s easy to understand why such a dramatic increase in labor costs would force them to cut back.

The survey also finds that the wage hike will cause one in five businesses in the city to strongly consider relocating across state lines. Given that the minimum wage across the river in Virginia is less than half that forthcoming wage in D.C., this is also not a surprise.

The associated reduced job opportunities will only exacerbate Washington’s 45 percent unemployment rate among 16- to 24-year-olds without a high school diploma. (In some neighborhoods east of the Anacostia River, the most recently available data shows overall unemployment for 16- to 24-year-olds approaching 60 percent.)

The societal implications of so many young men out of work are broader than those associated with just losing out on a paycheck. As Voltaire explained, “Work keeps at bay three great evils: boredom, vice, and need.” And vice is a pressing concern at the moment for policymakers and residents contending with a dramatic spike in violent crime.

After a decades-long drop, violent crime, which is overwhelmingly committed by young men, is rising again in cities like Washington D.C. The murder rate in the District was up more than 50 percent last year. Homicides are up again this year in more than two-dozen major U.S. cities.

Decades of academic literature finds that unemployment is correlated with crime. A 2003 study in Criminology finds that employment in early adulthood significantly reduces crime even among those who have already engaged in criminal activity. And a recent University of Chicago and University of Pennsylvania study published in Science found that teens with summer jobs committed violent crimes at about half the rate of the control group.

“If something doesn’t change, if we don’t get jobs for these kids, if we don’t change the economic situation, I’m worried that we could be looking at a bloodbath,” said the Rev. Corey Brooks, a pastor in Chicago, which has an even worse youth employment and crime crisis than D.C. “If something doesn’t happen, I fear that we’re potentially looking at one of the worst summers we’ve ever had.”

On July 1, Chicago’s minimum wage rises to $10.50 on its way to $13. Instead of finding more jobs for the city’s kids, it will put them further out of reach. Similar scenes are playing out in cities like Baltimore and Los Angeles, which have thousands of youth not working while city politicians are pursuing or have just passed dramatic minimum wage increases to make it even harder for the least skilled to get a job.

Recognizing how job opportunities reduce violence, many big cities have publicly funded summer jobs programs. Washington’s Marion Barry Summer Youth Employment Program provides subsidized jobs for 12,000 District youth aged 14 to 24. Yet many of the same policymakers championing these summer jobs programs are exhibiting cognitive dissonance by also supporting dramatic minimum wage increases that put nonsubsidized jobs further out of reach.

More crime, not just lost jobs, may be the real legacy of the Fight for $15.

Richard Berman is the president of Berman and Company, a public affairs firm in Washington, D.C.

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