The city council of the District of Columbia confirmed that it would increase the minimum wage within the area over the next couple of years.
The “Fair Shot Minimum Wage Amendment Act of 2016” works to modify the “Minimum Wage Amendment Act of 1992.” As a result of this act, which was signed by Mayor Muriel Bowser on June 7th, 2016, the city’s minimum wage will increase over the next several years. This growth will last until 2020, when it reaches a rate of $15 an hour.
Many are in support of the policy, holding that workers deserve to be paid more for their work, and that people in low paying jobs require more wealth in order to sustain themselves and lift them up out of poverty.
“I think it’s fair for people to be compensated and get the credit that they deserve,” says Joanna Sobieski, a graduate of American University’s School of Communication.
The primary focus of those in favor of the policy is making the new minimum wage a “livable wage,” in which someone can support his or herself without the need for outside assistance, which some believe would consequently decrease the cost of the welfare system on the government.
According to the “Living Wage Increase Notice of 2016” signed by Director of the D.C. Department of Employment Services, Deborah A. Carroll, states that the “livable wage” in the D.C. area is $13.85 as of January 1st.
While some support of the act, others are concerned about its potential consequences. “Some businesses will struggle to give higher wages to their workers and will have to shift their priorities,” says Max Leopold, an American University student in favor of the new policy.
Due to the increased cost in hiring workers that would result from the act, some people think that some businesses will be forced to fire some of their employees, forcing them into even more severe levels of poverty. Another possibility is that companies will raise the prices of their products in order to make up for their lost revenue, increasing the cost of living substantially. Others claim that when the minimum wage workers get a pay increase it will result in everyone who previously earned more them will also desire a raise in salary, increasing the severity of the previously stated issues.
One interesting factor to minimum wage laws is that for jobs in which employees are permitted to accept tips the minimum wage is much lower. This is because the gratuities payed by the consumer to the worker is meant to supplement their income at the cost of a higher wage. As a result, the minimum wage of employees who receive tips from consumers will be $5 instead of $15 by the year 2020.
Because of the new policy, Washington D.C. currently has a higher minimum wage than any state in the country. This is because more densely populated regions have higher costs, thus workers require a much higher income than in more rural areas. As a result, the local government institutes a higher minimum wage than the state’s mandated amount in order to ensure better that employees are fairly compensated relative to the common expenses of people living in the region.