D.C. Council member Tommy Wells is impatient to raise the local minimum wage. He hopes his colleagues will move quickly to enact an additional local hike above the national rate.
A hasty and haphazard decision, however, will harm those he hopes to help.
“We’re going to get a minimum wage increase,” Wells predicted in an interview last Friday. On that, there is little doubt – and scant opposition. Controversy centers on what constitutes a reasonable amount.
Wells indicated that he is not “wedded to a pride of ownership” on the issue. Regardless, his legislative proposal, one of three and enjoying the sponsorship of a majority of his colleagues, will likely be the framework for Council consideration.
Wells wants to raise the local rate by another dollar in each of the next two years, to a total of $10.25 beginning July 31, 2015. The current $8.25 is a dollar higher than the federal rate and in both neighboring Maryland and Virginia. Subsequent automatic annual increases would be tied to the higher “urban” Consumer Price Index. Wells also provides for a partially mitigating employer credit up to 25 percent of assessed property taxes for small businesses with annual gross revenues up to $2.5 million.
Wells has crafted an outline that, with modest downward revision in amount, a more measured implementation schedule and additional business offsets, merits approval. As offered, it would exceed the few elevated state rates nationwide, most by much.
Smarter in approach is that already initiated by D.C. Mayor Vincent Gray, who advocates a “reasonable” minimum wage increase. Gray has launched an expedited yet thorough examination of the scope and impact of variable increases. D.C. Council member Muriel Bowser has introduced legislation to create a Minimum Wage Revision Commission comprised of stakeholders and economists to fully assess the implications.
The mayor is correct to have undertaken assemblage of facts to inform action. Otherwise the unintended consequences and counterproductive results of too high an increase, too rapid a schedule or insufficient business offsets are a risk. Likewise, Bowser’s instinct to know-before-voting is deserving of Council approval.
Only 0.005 percent of those employed at District jobs, or approximately 4,000 workers, are paid the hourly minimum. According to the most recent Bureau of Labor Statistics report, 12 percent of D.C. jobs are hourly compensated.
The D.C. Council has not identified the demographics, skills, occupations or industries of hourly-wage jobs or determined the range and prevailing hourly amount paid. Nor have they appraised the likely effects on employment or net wages and benefits, or other factors. They have not considered the impact that upward pressure on hourly wages for those currently paid above the minimum will have on net employment.
They’re flying blind.
Wells would also admirably increase personal income tax standard deductions, but in advance of Council review of tax reforms recommended by the D.C. Tax Revision Commission, chaired by former Mayor Anthony Williams. Again, he wants to drag the cart up ahead of the horse.
A city desperate for new entry-level jobs with unemployment near 9 percent that graduates only 60 percent of high school students cannot afford to endanger the creation and availability of low-skill modest-wage employment opportunities. More than 11,000 applied in the first week for 1,800 jobs at planned Walmart stores following recent defeat of a large retailer minimum wage mandate of $12.50 an hour.
A sensible minimum wage adjustment must factor prevailing wages for hourly workers to prevent potential job losses or a net reduction in employment. Too steep an increase will result in reluctance to hire or the retention of existing employees for maximum staffing flexibility with a roll-back in hours to manage rising costs, or a reduction in benefits – particularly at small businesses.
Broad agreement exists for a reasonable and responsible increase in the local minimum wage. The D.C. Council needs to steady the rush to passage to ensure that it is both.