Metro

Ef­fects of rais­ing low wage are murky

The Washington Times Daily - - Metro - DEB­O­RAH SIM­MONS

Vin­cent C. Gray may not have said whether he will or will not run for a sec­ond term as mayor, but he cer­tainly dipped his toes into the murky Demo­cratic pool on Fri­day by propos­ing to raise the min­i­mum wage.

A move that surely would shore up union sup­port should he de­cide to run, the mayor wants to in­crease the cur­rent min­i­mum hourly rate of $8.25 to $10, a smaller boost than the one in­cluded in a mea­sure that a D.C. Coun­cil panel is sched­uled to vote on Mon­day.

The coun­cil bill would not only raise the hourly rate to at least $9.50 in July and set $1 au­to­matic in­creases ev­ery year, but it also would set sub­se­quent an­nual in­creases based on the Con­sumer Price In­dex be­gin­ning in 2017.

In a let­ter to coun­cil mem­ber Vin­cent B. Orange, chair­man of the Com­mit­tee on Busi­ness, Con­sumer and Reg­u­la­tory Af­fairs, the mayor made his ar­gu­ments for a min­i­mum-wage in­crease.

More im­por­tant, to the mayor’s credit, he also laid out co­gent ar­gu­ments against au­to­matic min­i­mum-wage in­creases.

As con­ser­va­tives and lib­er­tar­i­ans also have ar­gued, rais­ing the min­i­mum wage can be risky, es­pe­cially while the econ­omy con­tin­ues to strug­gle to­ward a sus­tained re­bound from the re­ces­sion.

This is surely im­por­tant as the Dis­trict and the rest of the D.C. re­gion still de­pend on the fed­eral gov­ern­ment as both a rev­enue gen­er­a­tor and job provider. Also, the fed­eral gov­ern­ment shut­down and the Dis­trict spend­ing mil­lions in rainy day funds to stay open didn’t help mat­ters.

The U.S. La­bor Depart­ment re­ported Fri­day that D.C. un­em­ploy­ment stands at 8.9 per­cent, a stark re­minder that law­mak­ers should move cau­tiously on bur­den­ing small busi­nesses.

As the mayor’s let­ter says, “Ex­ten­sive re­search on manda­tory min­i­mum wage rates show that in­creas­ing the min­i­mum wage leads to de­creased em­ploy­ment op­por­tu­ni­ties and Dis­trict pol­i­cy­mak­ers should not pro­ceed with au­to­matic in­creases with­out know­ing the im­pact on the Dis­trict’s la­bor mar­ket. More­over, there is con­sid­er­able doubt that Mary­land and Vir­ginia will in­crease their min­i­mum wage rates and, with­out a cor­re­spond­ing ac­tion on their part, the Dis­trict’s re­gional com­pet­i­tive­ness is threat­ened.” Why spec­ify Mary­land and Vir­ginia? Well, Vir­ginia is a right-to-work state and it fol­lows the Dil­lon Rule. The for­mer essen­tially neu­tral­izes union bul­ly­ing and the lat­ter essen­tially means lo­cal­i­ties can only do what the state al­lows them to do.

The mayor sin­gled out Mary­land be­cause, al­though the so-called Free State is a next-door neigh­bor like Vir­ginia and the three ju­ris­dic­tions co­op­er­a­tively work on such per­ti­nent is­sues as trans­porta­tion and en­vi­ron­ment con­cerns, the three ju­ris­dic­tions have al­ways — and will al­ways — com­pete for rev­enues.

The most sig­nif­i­cant among those rev­enues are in­come, busi­ness, sales, gas and prop­erty taxes.

That is why Vir­ginia did not par­tic­i­pate in what is mis­tak­enly called a re­gional min­i­mum-wage ef­fort that the Dis­trict and Mary­land put to­gether.

The mea­sure now be­fore Mr. Orange’s com­mit­tee would stub the toes of cur­rent small-busi­ness own­ers and those who are con­sid­er­ing set­ting up shop in the na­tion’s cap­i­tal — whether they are hair sa­lons and bar­ber­shops and small eater­ies, or small law, med­i­cal, com­mu­ni­ca­tions, high-tech firms and other pro­fes­sional busi­nesses.

The am­bi­tious Mr. Orange, at-large Demo­crat, has wanted to be mayor for a long time, and his 2014 bid isn’t his first.

But even he knows that no one knows what the Con­sumer Price In­dex will be next year, let alone in 2017.

With unions closely watch­ing the coun­cil vote, Mr. Gray has will­ingly dipped his toes into murky waters.

The law­mak­ers to watch are not so much Mr. Orange, but the other Democrats who want Mr. Gray’s job.

PHOTOGRAPHS BY AN­DREW HARNIK/THE WASH­ING­TON TIMES

A speed cam­era sits in the center me­dian along Bladens­burg Road in North­east on Sun­day. It is one of 100 new traf­fic cam­eras set up to catch vi­o­la­tors.

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