Wells Plan Not a “Living Wage for All,” But Minimum Wage Boost Still a Good Step

Will Sommer, the latest Loose Lips for the Washington City Paper reports that Councilmember (and Mayor-hopeful) Tommy Wells plans to introduce his own living wage bill for the District.

The bill, as described, is more — and less — than a “living wage for all” plan, as Wells calls it.

It’s got some tax benefits for local businesses, which are going to fight it anyway. And it would double the standard deduction. So a large majority of low and moderate-income residents could keep more of whatever wages they earned.

On the other hand, there’s a fee that large employers would have to pay if they didn’t pay a living wage (thus far undefined) and also provide health insurance for their workers.

Well, large employers in the District already provide health insurance, according to a recent study done to help implement the Affordable Care Act.

So it’s the living wage part that matters here. We can guess that it would sweep in more employers than the highly-targeted Large Retailer Accountability Act. This indeed is probably why Wells announced it shortly after getting a fair amount of grief for voting against the LRAA.

We’ll obviously have to wait for details on the living wage rate. But we do have specifics for what Wells has in mind for workers who won’t be eligible for it.

Employers that aren’t large — however that’s ultimately defined — would be subject to a higher minimum wage requirement. The current $8.25 an hour would be raised, over two years, to $10.25 and then indexed to rise with living costs.

Not a living wage in the strict sense, i.e., a wage sufficient to cover basic living costs. But so far as I know, there isn’t a “living wage” rate in the country that does. Even the super-minimum the Council majority wants to impose on “big box” retailers wouldn’t.

If Wells’s higher minimum wage were fully in effect now, a full-time, year round minimum wage worker would earn $21,320.

This is $17,464 less than what Wider Opportunities for Women calculated in 2010 as a “basic economic security” wage for a single D.C. worker, with no children — if s/he had not only employer-sponsored health insurance, but also an employer-sponsored retirement plan.

It’s about $48,900 less than a parent with one child needs “to get by” in the District, according to the Economic Policy Institute’s updated family budget calculator.

The proposed minimum wage would nevertheless achieve several important objectives.

First, it would delink the District’s minimum wage from the federal minimum. At this point, it’s always $1.00 higher — and has been since 1992.

So minimum wage workers in the District — and to some extent, our local economy — are hostage to whatever Congress decides to do. Or should I say not to do?

It’s been four years since the federal minimum wage reached the last step of its phase-in — and with it, the District’s. The latter is now worth about $1,518 less a year than it was then.

And who knows what the wage will be worth by the time Congress passes another increase?

Second, the bill Wells describes would avert further purchasing-power losses — and thus the need to re-fight the minimum wage battle over and over again.

Ten states and a handful of local jurisdictions have already adopted indexing, after an increase. The DC Council would be wise to also “fix it and forget it,” as Economic Policy Institute has recommended Congress do with the federal minimum wage.

EPI’s estimates for the stalled federal minimum wage increase indicate that 22,000 workers in the District would directly benefit.

An additional 14,000 would also get an increase because employers would adjust their wage scales to preserve a differential between their lowest-paid workers and those who’d been getting more.

Both numbers would, of course, be smaller if large employers had to pay a super-minimum wage. The end results would be similar, however.

Like other advocates, I could run out a longer list of reasons for reforming the District’s minimum wage. But the existing law already provides a good summary:

“Any wage that is not sufficient to provide adequate maintenance and to protect health impairs the health, efficiency, and well-being of persons so employed, constitutes unfair competition against other employers and their employees, threatens the stability of industry, reduces the purchasing power of employees, and requires, in many instances, that their wages be supplemented by the payment of public moneys for relief or other public and private assistance.”

I’ll have more to say about this. I hope the DC Council will too.

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3 Responses to Wells Plan Not a “Living Wage for All,” But Minimum Wage Boost Still a Good Step

  1. […] “living wage for all” proposal is not quite that but still a positive step (Poverty & Policy) New speed cameras deployed along 295 near Eastern Avenue […]

  2. […] Wells Plan Not a “Living Wage for All,” But Minimum Wage Boost Still a Good Step […]

  3. […] — with mixed success, as followers can attest. But trying I am. So I cut a piece out of my recent post on DC Councilmember Wells’s “living wage for all” plan. Here’s the […]

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