The D.C. Council voted unanimously on Tuesday to raise the minimum wage in the District to $11.50 an hour. The bill, if signed by Mayor Vincent Gray, would make D.C’s minimum wage one of the nation’s highest. Although the bill could certainly go further in ensuring that all D.C. residents earn a living wage, it is clearly a step toward a healthier and more just economy in the nation’s capital, and Gray should sign it.
Big businesses such as Wal-Mart and its allies in government say such a wage increase will hurt employment and drive companies out of business, but their claims are undermined by prevailing economic research. Labor economists have documented since the early 90s that raising the minimum wage generates more jobs—not fewer. Additionally, past increases in minimum wage under President Harry Truman and in 1967 showed no negative impact on employment rates.
Conservatives often worry about heightened inflation due to an increase in the minimum wage, but inflation since the financial crisis has been historically low, despite the Federal Reserve’s quantitative easing programs. If the Fed pumping hundreds of billions of dollars into the financial sector over the past five years hasn’t raised the price level to unacceptable heights, it’s unreasonable to say a modest wage increase like this one would.
This wage bill still isn’t perfect, and even its supporters recognize this fact. A conservative estimate for a living wage in the District is $12.50 an hour, and this bill will clearly need to be amended in coming years to keep pace with rising rents and other costs of living. According to the Economic Policy Institute, a family of four needed over $88,000 to live in D.C. during 2013. Given such a high cost of living, raising the minimum wage is an absolute necessity.
Even so, Gray has shown a propensity to bow to big business with his veto of the Large Retailer Accountability Act earlier this year. If the mayor wishes to seek reelection in the coming year, he should sign this new legislation immediately. Four of his challengers in his reelection campaign next year voted for the bill in the Council. It’s unlikely Gray will be able to win a second term without repairing his relationship with organized labor and low wage workers—many of whom are still angry over his veto of the LRAA.
Overall, this bill offers D.C. a chance to make a positive contribution to both economic justice and growth. That’s a win-win the Mayor can’t afford to pass up.
