In the District, the minimum wage wars aren’t over yet.
A month after Mayor Vincent C. Gray (D) vetoed a bill to force Wal-Mart to pay its employees 50 percent more than the city’s current minimum wage, four competing proposals headed to a D.C. Council committee this week will renew the debate over how to balance the push for higher wages with the desire to keep investment and jobs flowing into the city.
The committee is fast approaching a vote after a hearing Monday to recommend raising the District’s $8.25 hourly minimum wage to the nation’s highest — not just for Wal-Mart, but for every worker in the city.
The lowest of four competing council proposals would put the District near San Francisco’s chart-topping minimum wage of $10.55 per hour. The most generous would rocket the hourly minimum wage to $12.50, nearly $2 higher than in any U.S. city.
In the middle, a compromise of $11.50 per hour, also being promoted in the District’s Maryland suburbs, appears to be taking shape as a potential regional financial floor.
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The Wal-Mart confrontation exposed a rift among District leaders over how to stay true to their pro-labor leanings and liberal identity without scaring away badly needed economic development, such as the giant retailer’s plan to add five stores across the city.
But the clutter of ambitious proposals on the table this week appears to be doing something more: forcing a debate about the meaning of a minimum wage, and placing the city at the center of a national conversation over government’s role in lifting up workers and confronting stagnating wages among low-income earners.
“The District of Columbia is doing extremely well, and the folks who were here during the bad times deserve the opportunity to be here during the good times,” said council member Vincent B. Orange (D-At Large). Orange wrote the $12.50-per-hour proposal and is in charge of crafting the compromise, which he said in an interview Friday he would push as close to $12.50 as possible.
“For two people, that’s $52,000 [a year] . . . enough to buy a house in the District of Columbia and not be on food stamps,” Orange said. “That’s what this is about: a government that exhibits some kind of compassion that provides for people to have a better quality of life.”
Orange’s approach would push the District away from a minimum wage historically designed to keep low-wage workers just above the poverty line to one where employers would be required to pay closer to what proponents call a “living wage,” a measure of an area’s housing, food, clothing, child care and other everyday expenses.
Gray’s office is pushing back on the process. His administration has questioned how city officials arrived at the numbers in their proposals. As an alternative, his advisers have suggested slowing the process to more methodically determine what the District’s next minimum wage should be.
Gray’s administration issued a request for proposals for academics to study the District’s minimum wage. Among his questions: At what level does a higher minimum wage harm the city’s working poor by lifting them above income brackets in which they qualify for tax breaks, food stamps, housing vouchers and other public assistance? And at what point does it deter investors such as Wal-Mart from bringing jobs to the city?
“The mayor is committed to raising the minimum wage, but our end goal is to ensure that it is raised in a responsible way so that people who actually receive the minimum wage now have more at the end of the day,” Gray spokesman Pedro Ribeiro said.
Gray’s proposed four-month study of the city’s minimum wage would get in the way of Orange’s plan to bring a landmark minimum wage increase to the full council for a vote in December. “The executive branch is backing away from the minimum wage. That’s why they want the study,” Orange charged in the interview.
The District has not amended its minimum wage law since 1992, when it indexed its hourly rate at $1 above the federal minimum, then $4.25. Twenty years ago, that meant more to workers than it does today, because the federal minimum has not kept pace with inflation.
A mile down Pennsylvania Avenue from the D.C. Council chambers, the current federal minimum of $7.25 per hour has little prospect of increasing anytime soon. A proposal to raise the federal minimum to $10.10 has been derided as a “job killer” by members of Congress.
But for the custodians, cafeteria staff and other low-wage workers on Capitol Hill and across the city, it’s not a question of whether the minimum wage will increase, but by how much and how soon.
According to one rough estimate by city officials, as few as 4,000 employees make the city’s minimum wage, but more than 45,000 earn less than $10 per hour.
Every proposal on the table for D.C. lawmakers would affect the larger group, and experts on both sides of the debate expect that it would put additional pressure on employers to raise pay for tens of thousands who make just above $10.
More than a dozen D.C. businesses have voluntarily agreed to raise their minimums in line with a proposal by council member Tommy Wells (D-Ward 6). His plan would boost the minimum to $10.25 over two years and increase the District’s standard personal income deduction for low- and moderate-income households.
It would also add tax credits for small businesses and restaurants to offset some of the additional wage costs.
“We read about it and thought it made sense. It seemed like the right thing to do,” said Brandon Skall, co-founder of the rapidly growing D.C. Brau brewery. The start-up has yet to record a yearly profit, but “in truth, it’s only a few dollars,” he said. Only four part-time employees made minimum wage, he said, and two more had their pay increased by about a dollar to reach $10.25.
All of the proposals in the District would phase in over multiple years, with the top pay being reached in all cases by 2016 and then being indexed to inflation.
One major source of contention will be whether restaurant employees who earn tips are included in the hourly wage increase. Restaurants must pay a base of $2.77 and ensure that workers’ tips lift them to at least $8.25.
The Restaurant Association of Metropolitan Washington has said it wants the employer-paid base to remain unchanged but would support raising the required combination of tips and wages to a “reasonable” rate.
“The issue is, of course, what the reasonable increase is,” association President Kathy Hollinger said.
Dave Oberting, with Economic Growth DC, will also be among those arguing the counterpoint on Monday.
“At some of the rates that are being proposed, I think it strains credibility to assert there aren’t going to be job losses,” he said. “I think there should be as many minimum wage jobs as possible to get more people into the workforce.”