District of Columbia business interests have launched a campaign against a proposal to boost the D.C. minimum wage to $3.25 an hour and to automatically raise it further as other wages increase.
A special committee, which met yesterday, will try to raise about $50,000 to fight the proposal, said R. Robert Linowes, who describes himself as "the leading force" behind the group.
Linowes is president of the Metropolitan Washington Board of Trade, which with the D.C. Chamber of Commerce and a dozen other associations has formed the ad hoc committee.
Linowes said the committee has hired Andrew Brimmer, the former Federal Reserve Board member, as economic consultant and attorney Robert Rolnick, of the firm of Danzansky and Dickey, as its lobbyist.
Brimmer, whose job is to provide the facts and figures to back up the businessmen's views, is known to believe that raising the minimum wage can eliminate the jobs of marginal workers.
"That's happened in the past in the District said Linowes. "We don't want to see the city's economy destroyed" by making D.C. firms pay higher wages than their competitors in Maryland and Virginia.
Preliminary estimates by the board of trade are that the increase would cost D.C. businesses $10 million a year in higher pay for persons who now earn the minimum wage. Total payrolls will increase by $37 million because higher minimums usually means higher pay on up the line.
Higher payrolls are a threat to the very existence of many small, black businesses, who can't pass on or absord higher coasts, said James Denson, head of the minority-based D.C. Chamber of Commerce.
The District already has higher minimum wages than the surrounding suburbs and for several years has had the highest minimums in the country.
The D.C. minimums were criticized Monday in a speech to the U.S. Chamber of Commerce by J. Willard Marriott Jr., chairman of the food and lodging conglomerate.
Marriott - a volunteer for the drive against increasing the minimums - said his company has closed 14 restaurants in Washington and laid off 1,300 workers because of the steadily increasing pay rates.
"If the new minimum wages pass there will be more layoffs and more closings by us and other businesses," he warned.
A Marriott spokesman said escalating wage costs have lead marriott to cut back from more than 30 restaurants in the city to only 18 in the past decade. All of the Hot Shoppes sit-down restaurants have been closed, she noted, and in many cases full-service restaurants have been replaced with fast food or limited menu operations that use fewer workers.
The D.C. minimum wage proposal, sponsored by City Council member Hilda Mason, is patterned after a measure that is stalled in Congress.
The Mason bill would immediately boost the minimum hourly pay for 300,000 District workers to $3.25, 60 cents an hour higher than the federal minimum. It would also set up an indexing system, providing automatic increases in the minimums, starting in January, 1979.
Under the Mason bill, the D.C. minimum would be pegged at 60 percent of the average wage of production workers in manufacturing industries in the Washington standard metropolitan statistical area (SMSA). That rate now is $5.52 meaning the D.C. minimum would go to $3.31 an hour in January and probably higher if factory worker's pay increases between now and then.
The indexing plan would eliminate the need for the D.C. minimum wage and Industrial Safety Board, which now sets pay in various occupational categories.
Although the board has not taken a position on the Mason bill, Chairperson Paula Jewell said yesterday the minimum wage rates "are not something you should be merchanistic about." She said she favored the present system, which uses labor-management-public committees to set wages, which vary from occupation to occupation.
About 300,000 persons are covered by the D.C. minimums. Jewell said the majority of them are women and most are unskilled or semi-skilled workers in entry-level jobs.
Council member Mason said the automatic indexing provision is needed to keep low paid workers from falling farther and farther behind as inflation oustrips increases in their pay. The time-consuming procedures of the minimum wage board mean it is often four or five years between increases in the minimums, she complained.
Defending the differential between Washington wages and the suburbs, Mason, said, "even $3.25 is not enough for people to live on."
As for the claim that higher minimums eliminate jobs, Mason responded, "I just don't believe it. The facts do not bear out what the board of trade is saying."
The economist in Mason's corner is Dr. Mary Keyserling, who has frequently argued for higher minimums. Keyserling said. D.C. rates "should a little higher, our cost of living is very much higher" than in the suburbs.
The D.C. minimum wages are not to blame for the flight of jobs to the suburbs, Keyserling added. "Business goes where the people and dollars are," she said. "We have had massive migration to the suburbs."
Keyserling said there has been "a tremendous drop in purchasing power" for many workers, because of the long delays between increases in minimums under the present system.
Businessmen are arguing against their own best interest by opposing higher wage levels, she contended, "What they fail to realize is that people have got to have purchasing power."