In a letter sent last week to Mayor Gray and DC Council Chairman Mendelson, the DC Chamber of Commerce expressed support for an increase in DC’s minimum wage and to have the wage rise with the cost of living in the future. That’s encouraging, because it shows the business community recognizes the importance of making sure workers in DC can earn a decent living.
It’s also interesting because the Chamber’s study was authored by David Neumark, whose work on the minimum wage has been called into question by mainstream economists over the past two decades. His new report acknowledges research support from another organization, the Employment Policies Institute, which is funded directly by the restaurant industry to advocate against increasing the minimum wage. Nevertheless, Neumark’s report acknowledges many ways in which a minimum wage increase would help low- and moderate-income DC residents.
A coalition of business, labor, religious, policy research and community organizations have come together to support an increase in DC’s minimum wage to $12.50 by 2016 and then indexing the wage to the cost of living, as well as increasing the tipped minimum wage to at least 70 percent of the base minimum wage. Along with these reforms, the coalition supports passage of the “Earned Sick and Safe Leave Act of 2013,” which would improve DC’s sick leave law. We urge the DC Council and Mayor Gray to enact these moderate and reasonable approaches to making work pay for our residents.
Below, we outline areas in which there is common ground between the Chamber study and our coalition and areas in which we take issue with the Neumark study.
Many DC workers in low-wage jobs are in poverty. Neumark points out that “a higher percentage of workers earning less than $10 per hour in DC are in poverty than among all workers (20.41 percent versus 2.77 percent).” His examination of Census data also shows that almost half of these workers are in families with a household income at less than 150 percent of poverty, which is approximately $26,000 for a family of three. Finally, Neumark found that 94 percent of workers making less than $10 an hour are 20 years of age or older. Together, these data confirm that minimum wage workers tend to be adults helping support a family, and that most low-wage workers are in low-income families.
The minimum wage should rise with the cost of living by tying it to the Consumer Price Index. Right now, DC’s minimum wage is frozen, which means that purchasing power of the wage declines each year. Neumark advocates for the minimum wage to be indexed to the CPI for several reasons. For businesses, indexing creates a steady, predictable wage increase and eliminates the economic shock that comes with sporadic bumps in the minimum wage.
Low-wage DC workers are more likely to be residents than high-wage DC workers. Neumark notes that four-out-of-ten DC low-wage workers live in the District. While Neumark uses that to suggest that a minimum wage increase is not well targeted on DC residents, his data show that low-wage workers in DC are more likely than high-wage workers to be DC residents. This suggests that a minimum wage increase is a good tool to help low-income DC families. Moreover, the minimum wage isn’t the only tool to address poverty and income inequality but should be viewed as a part of a tool chest, which includes the Earned Income Tax Credit, subsidized child care, food stamps, and other policies to make work pay for low-income families.
POINTS OF DISAGREEMENT
Neumark states that a 10 percent increase in the minimum wage leads to a 1 to 3 percent decrease in employment among least skilled workers, but the most extensive and credible studies find no discernible impact on employment. Over the past 20 years, there has been a tremendous amount of research on the employment impact of raising the minimum wage. Most prominently, two leading “meta-studies” survey and pool the data from over four decades of recent research — and, as summarized by the Center for Economic and Policy Research in a recent review, these leading meta-studies show that the most rigorous research demonstrates that there is “little or no significant impact of minimum wage increases on employment.” Neumark provides a summary of numerous studies but fails to take into account the varying reliability of their findings. When taking statistical precision into account, the leading meta-studies find that the overwhelming evidence demonstrates that raising minimum wages does not lead to job losses. Indeed, businesses are able to pay higher wages without reducing employment due to a range of factors, including higher productivity and reductions in employee turnover that consistently result from minimum wage increases.
Neumark states that, due to the District’s small size, businesses might relocate to neighboring jurisdictions. Yet many of the businesses which pay low-wages are in the service and retail sectors which want to locate in the District to be close to customers. Even Neumark acknowledges his argument is based on thin evidence, because there is “little solid research on the effects of a higher minimum wage on business creation, destruction, or relocation decisions.” In fact, monthly surveys done by the National Federation of Independent Business consistently show that small businesses rank labor costs a low concern. They are most impacted by government red tape and other costs to their business. A widely-cited 2010 study, “Minimum Wage Effects Across State Borders,” looks at employment levels among every pair of neighboring U.S. counties that had differing minimum wage levels at any time between 1990 and 2006 – and finds that higher minimum wages did not lead business in those states to reduce their hiring or shift their hiring to neighboring counties with lower minimum wage rates.
Neumark suggests that there is limited research into the economic impacts of raising the minimum wage for tipped workers. In fact, an abundance of data exists in support of raising the base wage for tipped workers, which in DC remains stuck at just $2.77 per hour. DC falls into the bottom half of states when it comes to the minimum wage for tipped employees, such as restaurant servers, bartenders, and bussers. As a result of this low base wage, tipped workers in the District are estimated to earn a median hourly wage of only $9.31 per hour. Tipped workers have twice the poverty rate of the average worker in the U.S., and are more than three times as likely to rely on food stamps. There are seven states that have set the base wage for tipped workers equal to the value of the full minimum wage, and tipped workers in these states consistently earn higher wages without slowing job growth in the restaurant industry – indeed, according to the National Restaurant Association, a majority of these seven states are projected to have restaurant employment growth rates above the national average for the next decade.
The DC Council will likely consider a bill in the next few weeks that will raise DC’s minimum wage to $11.50 an hour by 2016 and index it to the cost of living thereafter. This proposal matches ones being considered by Montgomery and Prince George’s counties in Maryland. The coalition sees this as moving in the right direction, yet still advocates for the Council to approve a $12.50 wage indexed for inflation in order to raise the wages of the lowest-paid workers in the District toward a more realistic wage consistent with the cost of living. The bill should also include an increase for tipped workers and improve the city’s sick leave law by including tipped restaurant employees and allowing workers to accrue leave from the first day on the job.
A Growing Coalition:
This newly formed joint coalition is made up of the Paid Sick Days for All Coalition and the Respect DC Coalition. The Paid Sick Days for All Coalition is supported by Jews United for Justice, DC Employment Justice Center, Restaurant Opportunities Center of Washington DC, Academy of Hope, AFSCME Council 26, Amalgamated Bank, Asian Pacific American Labor Alliance (APALA), Bread for the City, Bread for the City Medical Clinic, Bright Start Childcare and Preschool, Busboys and Poets, Capital Area Food Bank, CLASP, Community IT Innovators, DC Coalition Against Domestic Violence, DC For Democracy, DC Fiscal Policy Institute, DC Jobs Council, DC Jobs with Justice, DC Primary Care Association, DC Safe, Eatonville, Economic Policy Institute, Fair Budget Coalition, Family and Medical Counseling Service, Inc. (FMCS), Family Values at Work, Flava, Inspire BBQ, James and Hoffman, P.C., La Clinica Del Pueblo, Labor Project for Working Families, Madhatter Restaurant, Many Languages One Voice, Mary’s Center, Metropolitan Washington Labor Council, Miriam’s Kitchen, MomsRising, National Association of School Nurses, National Consumers League, National Day Laborer Organizing Network, National Nurses United, National Organization for Women – DC Chapter, National Partnership for Women and Families, One DC, Operation Eatery, OUR DC, Planned Parenthood of Metropolitan Washington, Pleasant Pops, Politics and Prose, Positive Force, Public Citizen, SEIU 1199, SEIU 32BJ, So Others Might Eat, The New York Hotel Trades Council, The Women’s Collective, The Wydown Coffee Bar, UFCW Local 400, Unite Here! Local 23, Unite Here! Local 25, Washington Cable Systems, Washington Legal Clinic for the Homeless, We Are Family DC, WOW (Wider Opportunities for Women)
The Respect DC Coalition is supported by A. Philip Randolph Institute, American Friends Service Committee-DC Peace and Economic Justice Program, Bread for the City, Clean Water Action, DC Employment Justice Center, DC Environmental Network, DC Federation of Civic Associations, DC Jobs with Justice, DC Jobs Council, First Rising Mt. Zion Baptist Church, Florida Avenue Baptist Church, Food and Water Watch, Foundry United Methodist Church, Gray Panthers of Metro Washington, Israel Baptist Church, Jews United for Justice, Living Faith Baptist Church and International Ministries, Metro Washington Labor Council, New Prospect Family Life Center, ONE DC, Pennsylvania Avenue Baptist Church, Reentry Network for Returning Citizens, Restaurant Opportunities Center of DC, St. Theresa of Avila Catholic Church, UFCW Local 400, Ward Four Thrives, Wider Opportunities for Women
We remain disappointed and angry with Mayor Gray and Council Members Alexander, Bonds, Bowser, Catania, Cheh and Wells who, last week, made it clear that they are on the side of corporate greed and against the will of their constituents. Despite their inability to stand up to big, outside, corporations, we forced our elected officials to admit that $8.25 is not enough in DC. The rejection of the Large Retailer Accountability Act (LRAA) by a minority on the council and the Mayor was only the beginning of the fight for a living wage. We will not stop until all District workers are paid fairly.
“According to a Hart Research survey, 71 percent of DC residents were in favor of the LRAA. We have talked to thousands of District residents over the past several months, and the message we have heard is clear: We deserve better than the poverty wage jobs,” said Reverend Edwin Jones, Senior Pastor at Living Faith Baptist Church. ”Unfortunately, our Mayor and six of our Council Members disagree, and seem more interested in corporate money and attending ribbon cutting ceremonies, than in making sure DC residents have access to good jobs that will allow them to remain in an increasingly expensive city. DC residents know we are worth more and we will not stop until we get the wages we deserve.”
“Although the LRAA failed, we created an environment within the DC Council and the community in which the Mayor and three council members who voted with big business felt the need to attempt to cover up their abandonment of DC’s working families by introducing their own minimum wage proposals,” said Kimberly Mitchell, a lifelong Ward 7 resident and Macy’s employee. “Because of our work the living wage and minimum wage issues are at the forefront and our elected officials have finally been forced to pay attention to low wage workers. We will not let large corporations, working in conjunction with some of our elected officials, evict us from our city without a fight.”
“We will not allow the will of the people of the District to be manipulated by the same elected officials who just allowed large corporations like Walmart to bully them into submission,” said Reverend Graylan Hagler, Senior Pastor at Plymouth United Congregational Church of Christ. “This is one of the most expensive cities in America, and we need a minimum wage that reflects that reality. Because so many of our elected officials continue to fail on this issue, we will be developing a proposal that works for DC residents and we welcome all elected officials who stand with the people of this city to support us as we pass it into law.”
Seven D.C. Council members stood with us. Six stood with Walmart. And Walmart, again, was able to strong-arm legislators into selling out working people.
Despite tens of thousands of emails, calls and visits to council members’ offices, the D.C. Council failed to override Mayor Vince Gray’s veto of the living wage bill for retail workers.
Six council members—Yvette Alexander, Anita Bonds, Muriel Bowser, David Catania, Mary Cheh, and Tommy Wells—ignored the overwhelming support for this bill from people across the District. But the fight for fair pay for workers in the District isn’t over and we need to thank those who stood with us and ask them to support a living wage for all workers going forward.
Please take a second to thank council members Marion Barry, Jack Evans, Jim Graham, David Grosso, Kenyan McDuffie, Phil Mendelson and Vincent Orange for supporting working people and a living wage for retail workers in the District.
Together, we’ve built a movement that isn’t going away.
We made sure the issue of a living wage was front and center across the country. We exposed Walmart’s hypocrisy and just how far they will go to deny workers fair pay.
And we backed council members into a corner; forcing them to have a real conversation about raising the wage for all working people. For the council members who sided with Walmart, we need to let them know there will be consequences. But we also need to show those members who voted for a living wage for retail workers that we’ve got their back.
As New Polling Shows 71% of DC Voters Support the LRAA, 63% More Likely To Vote for Mayoral Candidate who Supports the Bill…
DC VOTERS TO MOBILIZE FOR GOOD JOBS
Group to Call on Council to Override Mayor’s Veto of Living Wage Bill
WASHINGTON, DC–With the DC Council preparing for an override vote of Mayor Gray’s shortsighted veto of the Large Retailer Accountability Act (LRAA), DC residents from neighborhoods throughout the city will be taking their calls for fair wages and good jobs to Council on Tuesday. The bill, which would ensure that large, profitable retailers pay a minimum of $12.50 an hour to employees, has been recognized by local residents, Council Members, policy experts and economists as a bill that would help improve jobs and bolster the local economy.
New polling shows from Hart Research shows that voters overwhelmingly support the LRAA. Seventy-one percent of voters voiced their support in a survey conducted this weekend, with large majorities saying the bill will have positive effects not only on workers’ wages, but also on jobs, employment and the local economy. Support was particularly high in Wards 5 and 7. Additionally, 63 percent of voters said that they would be more likely to support a mayoral candidate in 2014 who supports the LRAA.
More information on the polling, including full results, is below.
At 12 pm on Tuesday, hundreds of people – including Revered Graylan Hagler of Faith Strategies and Plymouth United Congregational Church of Christ, Kimberly Mitchell, a life long Ward 7 resident and Macy’s employee, Reverend Edwin Jones of Living Faith Baptist Church, Advisory Neighborhood Commissioner Dyana Forester, and more – will be rallying for an override on the front steps of the Wilson Building, 1350 Pennsylvania Ave. NW Washington, DC 20004.
WHO: Respect DC, Forward 7, Ward 4 Thrives, Faith Strategies, OUR DC, UFCW Local 400, Metropolitan Washington Council, AFL-CIO, DC Jobs with Justice, Fair Budget Coalition, Jews United for Justice, DC Employment Justice Center, OUR Walmart, and more
WHAT: Rally for Good Jobs in DC, Call on Council to Override of Living Wage Bill
WHEN: 12:00 pm, Tuesday, September 17
WHERE: Wilson Building steps, 1350 Pennsylvania Ave NW
The rally comes as Walmart workers in the DC area and nationwide have increased their calls to improve jobs at the country’s largest employer. Last week, 100 workers and supporters were arrested when refusing to end their calls for better jobs at Walmart.
A report from the national public policy center Demos shows that better jobs at Walmart and other large retailers would even help the store’s bottom line, as well as have an impact on individual families and the larger economy. A wage floor equivalent of $25,000 per year for a full-time, year-round employee for retailers with more than 1000 employees would lift 1.5 million retail workers and their families out of poverty or near poverty, add to economic growth, increase retail sales and create more than 100,000 new jobs.