DC Embraces $15 Minimum Wage

DC Embraces $15 Minimum Wage

The Washington, DC city council voted on Tuesday to raise the city’s minimum wage to $15 an hour by 2020, Buzzfeed’s Cora Lewis reports:

The raise was opposed by many in the business community, with the D.C. Chamber of Commerce releasing a poll showing half of all business owner respondents saying they would reduce their payroll and eliminate jobs if a $15 minimum was approved. Some labor advocates also expressed disappointment in the bill, saying it didn’t go far enough. The City Council rejected proposals to phase out rules that allow tipped workers to be paid at levels below the minimum wage.

D.C. employers may pay tipped staff, such as servers and nail salon workers, less than $3 an hour, with the expectation that tips will make up the rest of their wages. When business is slow and tips are scarce, employers must pay their workers the difference between their paychecks and the district’s minimum. But a 2010 White House Study found that employers often fail to make employees whole, and in 18 states, the tipped sub-minimum wage is as low as $2.13. … Under the law approved in D.C., the district’s tipped sub-minimum will rise to $5.00 per hour from its current $2.77 and then be indexed to inflation.

Aaron Davis at the Washington Post observes that the measure will create a significant disparity between the capital and neighboring Virginia, which adheres to the federal minimum of $7.25 an hour. That, critics assert, will virtually guarantee an exodus of jobs from the district:

According to one estimate, the measure would mean a raise for 70,000 janitors, parking attendants, dishwashers and others, and it probably would put upward pressure on the wages of 44,000 more workers who are paid slightly above the new baseline. But critics say a $15 minimum will be an order of magnitude larger than any previous wage floor and could prompt businesses to lay off workers, reduce their hours or increase automation such as self-serve kiosks.

James Sherk of the Heritage Foundation warned that the District might lose jobs in restaurants, hotels and other service industries. Walmart announced this year that it would not open two planned stores in the city in part because of high labor costs and other expenses. “D.C. is only a few square miles. It will be relatively easy for businesses to relocate,” Sherk said. “People can stay in hotels in Arlington, they can go out to dinner in Alexandria. … There could be a migration of jobs from the District.”

The DC council’s vote comes amid a cascade of similar laws in states and localities around the country. New York State legislators recently agreed to raise the minimum wage in New York City to $15 by the end of 2018, along with smaller and slower increases in other parts of the state, while California aims to raise the minimum to $15 statewide by 2023.

Some employers, perhaps sensing the direction in which the winds of change are blowing, have committed to raising wages voluntarily for their lowest-paid employees. Last month, for example, Allstate announced that it would introduce its own $15 per hour pay floor for corporate workers in the US. Walmart, the country’s largest private employer, hasn’t quite embraced the Fight for 15, but did raise wages for 1.2 million employees earlier this year and later credited that decision for an improvement in its first-quarter profits.