December 4, 2013 | by Mark Lee
Council grandstanding will hurt low-wage workers

Local business groups, owners of both small and sizable businesses, and District residents have indicated support for an increased

money, Council, gay news, Washington Blade

(Washington Blade photo by Michael Key)

D.C. minimum wage. A hike in the current $8.25 per hour, one dollar higher than the federal minimum and already among one of the higher rates in the country, is not in question.

What is at stake is whether an increase will be reasonable and responsible. On that score, the first of two required D.C. Council votes on Tuesday afternoon unanimously approving a super-minimum wage hike fails.

The legislation, advanced by lead sponsor Vincent Orange, provides for a three-year phase-in beginning with a hike to $9.50 in July of next year, adding one dollar in two subsequent annual increases to reach $11.50 per hour on July 1, 2016. The rate would then stabilize, increasing commensurate to the consumer price index.

To the overwhelming relief of tipped workers, the Council preserved the current applicable wage system specifying an employer-paid $2.77 per hour base pay and requirement that any differential in base-plus-tips and the minimum be guaranteed by employers in the rare instances that combined wages do not exceed it.

Employees earning tips had worried that an increased base pay would reduce customer tipping and cause significant reductions in income. Tipped workers were also concerned that bars and restaurants would be forced to reduce both staffing and hours to accommodate the extraordinary costs of a higher base pay.

Surprising to most, only approximately 4,000 of 745,000 employees at District businesses are paid the minimum wage. This modest 0.05 percent increases by an estimated 3,000 paid below the proposed rate when implemented, according to Council Chair Phil Mendelson.

Contrary to public perception, few of these are bar and restaurant workers, where wages above the proposed level are commonplace. Fast food outlets, some national retail corporations and local community small businesses are thought to employ most of the small number earning less than $11.50 per hour.

D.C. Mayor Vincent Gray reaffirmed his support for a minimum wage increase in a letter to the Council immediately prior to the vote, smartly supporting a staged increase to a sensible $10 rate with no automatic trigger in subsequent years. Gray had also previously requested the Council support his plan for an immediate three-month study of the scope and impact of an increase to best determine a rational amount without deleterious effects.

Council members, however, weren’t interested in facts or figures – despite Gray’s pledge to provide them with data as acquired. Understanding implications would not require implementation delay.

Instead, Council members are intent on forging ahead in an all-too-familiar act-hastily worry-about-it-later manner, offering mutual self-congratulation for preliminarily approving the nation’s highest rate.

Absent negatives at specific wage levels, mandating a much higher so-called “living wage” would be possible. Undisputed, however, are counterproductive rates causing economic harm.

The math is no mystery. If a small business employs 10 full-time workers, the annual payroll increase from the current rate to $11.50 an hour is $71,500 in annual base costs alone. For many owners, that exceeds profitability and their salary. Available solutions are reducing the number of employees or, to maintain staffing flexibility, reducing hours – or both.

For some retailers and fast food franchisees, customer service automation is increasingly attractive. Ask CVS about self-scanned checkout, or the 7,000 McDonald’s locations in Europe already utilizing ordering and payment kiosks.

Blithely increasing the minimum wage too high and too fast causes low-skill employment to stagnate or suffer reductions – in a city graduating only 59 percent of high school students and with high adult unemployment.

No one should be surprised that a Council comprised of those with no practical private sector experience, real-world business operation or responsibility for meeting payrolls would place smug satisfaction ahead of those in need.

The working poor and unemployed low-skill workers who desperately need smart leadership from elected officials will pay the price for this foolishly cavalier behavior.

Mark Lee is a long-time entrepreneur and community business advocate. Follow on Twitter: @MarkLeeDC. Reach him at OurBusinessMatters@gmail.com.

7 Comments
  • This dude really does speak truth to power.

  • So the Goldilockses who said the big-box bill was too narrow now say this one is too broad. Yeah, nobody saw that hypocrisy coming! (rolling eyes)

  • I'm surprised we're still around to debate this, given the horrendous apocalypse predicted by Lee if we stopped letting bar owners pump their employees' lungs full of cigarette smoke.

  • i think nothing quite epitomizes the perceived gulf between gay politics and racial politics quite like this. just at face value the opinion is laughable, “only approximately 4,000 of 745,000 ” –thats a 185 percentage-point margin! “To the overwhelming relief of tipped workers”…really?! tipped workers are relieved to earn a tipped minimum wage that hasn’t be raised in two decades, while cost of living has increased double digits?!

  • Joni Podschun-Hansen

    This is shoddy journalism disguised as concern for low-wage workers. To publish it as an opinion piece is cowardly on behalf of the author and the editorial staff. If you're going to speak for workers, be a journalist and quote them and then you can also quote Mark with his classist and racist counter-opinions. I'm ashamed that this is acceptable in a queer publication.

  • If bosses are going to fire low wage workers if they are required to pay a living wage, it has to be asked what work are they ready to be left undone? Will restaurants stop washing dishes? Will retail stores stop restocking shelves? Will truck drivers be laid off and products left undelivered? It does not seem that most businesses are going to forgo such tasks because of wage improvements. Mark mentioned automation but are businesses really not taking advantage of opportunities to automate because of cheap labor costs?

  • Every organization of restaurant employees that has commented on raising the minimum wage for tipped workers, supports the increase (Food Chain Workers Alliance, the Restaurant Opportunities Center, the Hotel Employees and Restaurant Employees, and The Welcome Table, to name a few). An on line petition lists hundreds of tipped workers asking for a higher minimum.

    Maybe there are alternative opinions out there among tipped workers, but Mark needs to name them, not just assert his opinion. He has not cited even one organization of tipped workers or even one such worker. He shouldn’t present his opinion as someone else’s.

© Copyright Brown, Naff, Pitts Omnimedia, Inc. 2014. All rights reserved.
Directory powered by Business Directory Plugin