Last Thursday, CNHED hosted a two part panel discussion, the first half was regarding DC’s Universal Paid Leave legislation, which was presented by Councilmember Elissa Silverman. The second portion was about DC’s ballot initiative to raise our minimum wage from 10.50 to $15 dollars by 2020, which was presented by Delvone Michael, Washington DC Director of Working Families. These initiatives strive to increase the quality of life of residents and workers in the District, and make DC a more affordable and equitable place to work and live. Although both initiatives are important, this week’s blog will focus of the $15 minimum wage.
Many cities across the nation are pushing for a $15 minimum or living wage. Research shows that Washington, DC would be a good candidate for this increase. Not only do many of our native and low-income residents need the wage increase, but the District’s economy is strong enough to absorb the costs.
As an organization that builds affordable housing, we strive to help DC residents increase their social mobility and economic resources through homeownership and other types of housing. However, receiving a wage in which one can afford housing, health insurance and child care goes hand in hand with achieving equality and mobility in the District.
Whenever large changes like a minimum wage increase are considered, opposition and concern are natural. However, overall, increasing the minimum wage in DC should have little, if any negative impact on employment. Moreover, the positive impacts that it will have on those who need it will be substantial. Research shows that in the District, higher minimum wages would reduce the share of individuals with incomes below 50, 75, and 100 percent of the poverty line . This is an important statistic, and it illustrates that increasing the minimum wage could be a life changer for many residents.
Currently, the average minimum wage worker is a 35 year old woman with at least some education, and is likely to have kids. Can you image how difficult it is to raise children on $10.50 an hour? Various studies recommend that the minimum wage should be set at 50% of the median wage. In the 1960’s and 1970’s, the US minimum wage relative to the median wage was 48%. However, in 2015, DC’s current median wage is $31.20 an hour, while our minimum wage is only 34% percent of that, at $10.50 per hour.
A common concern is that this type of initiative would harm small businesses. However, a survey conducted by the Department of Labor has shown that on the federal level, most small businesses approved an increase in minimum wage from $7.50 to $10.10 Although $15 is significantly, larger than $10.10, this data reveals that overall, small businesses are not opposed to increasing their employees pay and given the right circumstances, more cities may be open to increasing the minimum wage to $15.
Furthermore, in places where a $15 minimum wage was put into effect, many businesses saw an increase in revenue, which may be due to businesses benefiting from the low turnover rates that result from higher wages, greater employee motivation, and price increases that companies implement in order to pay their employees.
Given recent research, it appears that Washington, DC would be a good candidate for a $15 minimum wage. In order for there to be income equality in the District, people have to be able to afford to live and work here. Increasing the minimum wage is one way to reduce income inequality. If you would like to support it, be sure to look out for the $15 minimum wage on the ballot in 2016.
Special thanks to Adam Kent of LISC and Katharine Richardson of Princeton University for their assistance with this piece.