The D.C. Council passed a "living wage" bill March 7. The "Way to Work" Bill 16-286, guarantees a minimum wage of $11.75 an hour to D.C. government workers and residents who work at businesses that receive city subsidies or tax abatements. (Living wage ordinances require employers to pay wages that are above federal or state minimum wage levels.) The bill also strengthens requirements for city contractors to give hiring preferences to D.C. residents and establishes a job training and employment center for city residents. Mayor Anthony Williams, who has long been a proponent of the bill is hailing the move by the council.
Proponents of living wage laws say they are a response to a growing number of Americans who work but are unable to make ends meet. Low income workers are dependent upon minimum wage jobs that have not kept pace with rising housing, health care, and other costs of living. According to the
DC Fiscal Policy Institute, one in six District residents has a “poverty level” wage, which means that they earn too little money to lift a family of four above the poverty line even if they work full-time.
The
Economic Policy Institute states that living wages have been enacted in some 120 jurisdictions across the country. Again, according to the
DC Fiscal Policy Institute, ".......studies have been done in more than 20 jurisdictions that have living wage laws and they generally point to the same conclusions: 1) Living wages laws have a minimal fiscal effect on businesses — less than a 1 percent increase in contract costs across the board. Businesses generally absorb these costs without laying off workers or avoiding government contracts altogether; and , 2) While the effect is minimal there is some effect, particularly for human services contracts, which depend on government to help cover their increased contract costs."
Those opposed to living wage legislation site studies of minimum wage laws in countries around the world showing that fewer people are employed at artificially higher wage rates. Moreover, they claim unemployment falls disproportionately on lower skilled workers, younger and inexperienced workers, and workers from minority groups. The new
Cato Institute study cites data showing job losses in places where living wage laws have been imposed.
The
Cato Institute sites "decades of research [that] have shown that the minimum wage harms the least-skilled workers from poor families while heavily benefiting young workers from middle-income households. Several studies critical of the living wage come to similar conclusions. The main beneficiaries of the living wage are public-sector unionized employees because of the reduced incentives for local governments to contract out work. Instead of exploiting grievances of the marginally employed against "greedy" employers, advocates for the poor should focus their energies on building the skills of the poor."
What are your thoughts? Will the new living wage passed by the DC City Council make a difference in the lives of working families here in the District, or will it benefit only a few, while driving prices up and making it harder to find work?
