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It’s been a roller-coaster year for advocates of a higher minimum wage in the District. In June, the D.C. Council passed the Large Retailer Accountability Act, which would have required stores with more than 75,000 square feet and parent companies that gross at least $1 billion per year to pay a “living wage” of $12.50 an hour to their employees. In September, Mayor Vince Gray vetoed it. In anticipation of and immediately following the veto, several members of the D.C. Council presented alternative minimum-wage bills, and earlier this week, the Council unanimously passed legislation to raise the minimum wage gradually from $8.25 to $11.50 by 2016. Although Gray was pushing a $10 minimum wage that wouldn’t increase with inflation, as the Council-backed one does, he says he’ll sign the bill.
So the question is: Was this a half-win salvaged from an earlier defeat, or was it an even bigger victory for workers’ advocates than the living wage bill would have been? Comparing an immediate $12.50 minimum to an eventual $11.50 would seem to indicate the former. But a look at the number of workers affected makes a strong case that the successful bill is in fact a far better outcome for labor activists.
The D.C. Fiscal Policy Institute’s Elissa Silverman (a former City Paper staffer), who’s studied and advocated for a higher minimum wage, did some back-of-the-envelope number crunching to show just how many more workers will benefit from the approved minimum wage. Using data from the Center for Economic Policy Research and Congressional Budget Office inflation projections, Silverman found that the 10th percentile of workers who live in D.C. will earn about $10.85 an hour and the 15th percentile will earn $12.50. So around 12 percent of working D.C. residents will be making under $11.50 in 2016. In other words, 12 percent of working D.C. residents will benefit from the $11.50 minimum wage in that year.
According to the Office of the Chief Financial Officer, there are 334,000 workers living in D.C. That means slightly more than 40,000 D.C. residents are likely to see a higher wage as a result of the new law.
Compare that to the living wage bill. Only about six large retailers would have been affected at first by that bill, Silverman says. The first two D.C. Walmart stores together employ 600 people, and the company claims that 68 percent of those employees, or about 400 people, are D.C. residents. If each of the other stores also employs about 200 D.C. residents, then even if Walmart opens the three to four additional stores it has planned, we’re still unlikely to see more than 3,000 D.C. workers getting a wage boost by 2016.
Yes, $12.50 is more than $11.50. But 40,000 higher-paid residents is a whole lot more than 3,000. On the whole, it seems, the failure of the living wage bill and the success of the across-the-board minimum wage hike is good news for D.C.’s low-paid workers.
Photo by Aaron Wiener