$15-per-hour wages go to Washington: What's next?

The District of Columbia City Council is in the process of approving a controversial measure to mandate a $15 per hour minimum wage, as the nation's capital moves to contribute its own experience to a national discussion.

First Look

The District of Columbia has approved a measure to raise its official minimum wage to $15 per hour, a possible solution increasingly cited for the stagnation of wages in low-paying jobs.

The Fight for $15 movement's controversial solution for income inequality has rallied fast-food, home care, and retail workers to protests around the country and successfully convinced a number of cities and states around the country to adopt the experiment. 

The city council of Washington, D.C., voted unanimously to join in, passing a measure on Tuesday to move the district's minimum hourly wage to $15 by 2020. The final vote is set for later in June, but Mayor Muriel Bowser (D) has already promised to sign the bill. 

"Raising the minimum wage will help address the issues of residents being pushed out of the District due to rising costs of living and income inequality," said co-sponsor Councilmember Vincent Orange in a hearing.

Mr. Orange and other supporters of the bill – including unions – said the district's rapid growth and healthy economy make a swift move economically viable. The district's current minimum hourly wage is $10.50, up from the federal minimum of $7.25, but it will rise by a full dollar as of July 1. Increases tied to inflation are planned after the $15 goal is reached. 

A report by the Economic Policy Institute (EPI), which supports such initiatives, estimated the bill would increase the income of 114,000 workers and one-fifth of the district's private sector. 

"Once the minimum wage reaches $15, the average affected worker would earn roughly $2,900 more each year than she does today," according to an EPI report by David Cooper. 

Some councilmembers worried this wage increase is too shallow, while others outside the council worried it had gone too far. The district's Chamber of Commerce opposes the measure, saying it should wait until the network of suburbs surrounding the nation's capitol mirror the move. The district's restaurant sector also opposed the move as unsustainable and threatened layoffs if it passed.

A similar situation is playing out in Portland, Maine, where the city raised its hourly minimum wage to $10.10 while the rest of the state did not, as The Christian Science Monitor's Simon Montlake reported. Some restaurants cut hours, but most have survived, although they point out that $10.10 is an easier jump than $15. The wage increase was as much as 34 percent for some and helped to match the growing city's rent costs, which compare to Boston.

"The sky has not fallen," Greg Dugal, a prominent lobbyist for restaurant and hotel owners, told the Monitor.

Although the cost of living in Portland is much lower than the District of Columbia and its restaurant business relies more on fine dining and family businesses, it has provided one viable example of a wage increase and contributed to the ongoing national discussion:

Taken together, these state and local policies amount to a national experiment in how labor markets operate and how companies respond to rising payroll costs. They add another overlay to the red-blue political map: Democrat-run states tend to favor higher minimum wages, in contrast to Republican-controlled states, particularly in the South. The upshot is that by 2022, states like North Carolina and Alabama could be paying wages half those mandated in New York and California.

This report contains material from Reuters.