It’s official. Washington DC has joined the likes of California, New York, and Seattle. Workers in the city can now bask in the glory of a $15 minimum wage. The DC Council unanimously voted to approve the wage hike, and the mayor has agreed to sign it into law.
Washington DC however, is bit different. Unlike previous states and municipalities that have proposed and established such a high minimum wage, Washington DC has statistics to back up what happens when you drastically increase the minimum wage. In 2014, the city increased wages from $8.50 an hour to $11.50 an hour, so prior to the $15 wage hike, a survey was conducted among businesses in the city. They were asked about what that little raise did to their bottom line, and the results were not good. According to the Employment Policies Institute:
“Employers affected by the proposed increase to a $15 minimum wage were asked if they had either reduced the number of employees on their staff, or reduced the hours of current employees, to adapt to recently enacted minimum wage increases,” the report says. “Nearly half of employers surveyed had already taken one of these steps—suggesting that 2014-16 minimum wage increases haven’t been absorbed through higher prices alone.”
And as you might expect, many of these businesses are struggling to figure out how they’re going to deal with the new wage hike.
According to the report, just over half of the businesses surveyed said they planned to raise prices in order to offset the cost of a minimum wage hike. Thirty-five percent said they would likely reduce staffing levels and 37 percent said they would reduce employees’ hours or reduce the number of hours they were open for business. Thirty-one percent of businesses said they were very likely to hire more skilled workers in the future to offset the higher wage.
One in five businesses said they would move out of the District of Columbia and into Arlington, Virginia where the minimum wage is $7.25 per hour. Sixteen percent of businesses surveyed said they were somewhat likely to close their business if the minimum wage hike were implemented and 6 percent of businesses said they would likely close.
Of course, this shouldn’t come as a surprise to anyone with common sense. If you increase the cost of doing business, then businesses will have to make cuts somewhere.
Ultimately, the minimum wage doesn’t create jobs, or put more money in the pockets of lower-income Americans. While there will be a few workers who are lucky enough to get a raise and keep their original hours, most will lose something. They may lose their jobs or their benefits. They may have fewer hours, and most likely, they will have to work harder during those hours to compensate for the reduced workforce. In other words, they will have to earn that extra money, which probably isn’t what the Fight for $15 folks had in mind.
When you really break it down, the minimum wage is an attempt to create something from nothing, and obviously it fails to do that. It provides higher wages to some, but exerts more pressure on different parts of the economy. It kills jobs, makes it harder for young, inexperienced job seekers to enter the workforce, and gives larger companies with more money an advantage over smaller companies that can’t absorb the higher costs of doing business.
Which is funny, because efforts to raise the minimum wage always come from leftists who complain about the 1% and wealth inequality. Unfortunately, all it does is give the richest business owners an edge over upstarts, and it hurts the poor and inexperienced who are trying to find whatever job they can. Unfortunately, the people of Washington DC are about to learn that the hard way.
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Contributed by Joshua Krause of The Daily Sheeple.
Joshua Krause is a reporter, writer and researcher at The Daily Sheeple. He was born and raised in the Bay Area and is a freelance writer and author. You can follow Joshua’s reports at Facebook or on his personal Twitter. Joshua’s website is Strange Danger .