By Phil Mendelson, Washington Post
But before the District acts to raise the minimum, The Post’s editorial board would have us wait and study the issue.
In the Nov. 11 editorial “Better pay,” The Post offered three supposedly unanswered questions: How many D.C. residents would be affected? At what level might a higher minimum wage harm the working poor by rendering them ineligible for certain public assistance? And at what point could an increase discourage employers from locating in the District?
The first question is irrelevant. But the answer is about 7,000. So, are we to leave the minimum wage at $8.25 an hour ($17,160 a year) — a poverty wage — because two-thirds of the District’s minimum-wage earners live elsewhere?
We already know the answer to the second question, too. Looking at more than a half-dozen benefit programs targeting the poor (including child care and housing assistance programs, Temporary Assistance for Needy Families and the earned-income tax credit), it is clear that increasing the minimum wage to $10.50, based on income requirements at this time, would have no effect on eligibility or benefits except for some reduction in food stamps for a two-person household.
However, that analysis raises another question: Should the government, in effect, subsidize private-sector employers that pay poverty wages? That’s what happens when a full-time minimum-wage job leaves a family below the federal poverty guidelines. A 2009 report by the Ohio Department of Job and Family Services, for instance, found that more than 15,000 Wal-Mart workers were on Medicaid while more than 12,000 received food stamps.
As for discouraging employers from locating in the District, a recent analysis commissioned by the pro-business D.C. Chamber of Commerce found “little solid research on the effects of a higher minimum wage on business creation or relocation decisions.” But we know this much: According to data provided by the Office of the Chief Financial Officer, more than two-thirds of minimum-wage jobs are in the food preparation-serving sector; the low-wage restaurants are more likely to be McDonald’s than the Prime Rib; McDonald’s is not a destination restaurant to which diners will travel far; thus, not too many minimum-wage jobs will relocate out of the District.
The effect of the minimum wage on employment is one of the most studied concepts in economics; we do not need another study to show that the minimum wage does not increase unemployment.
A “living wage” is based on the cost of housing, food, transportation, taxes, etc. According to the MIT “Living Wage Calculator,” the living wage for the District is $13.67 an hour. Yet the District’s current minimum wage is $8.25.
Raising the minimum wage is the right thing to do. Waiting is not.
The writer, a Democrat, is chairman of the D.C. Council.