Mayor Gray Signs Minimum-Wage Increase into Law, $9.50 per hour starting in July

From the Mayor’s office:

“Mayor Vincent C. Gray today joined Council Chairman Phil Mendelson in signing the Minimum Wage Amendment Act of 2013 into law. The bill increases the minimum wage for all District workers to $9.50 per hour starting in July of 2014, and includes provisions that will further increase the wage in the future.

“Last year, I vetoed the Large Retailer Accountability Act in part because it would only raise the minimum wage for a small percentage of the District’s workers. I said at the time that I supported an across-the-board wage hike. Today, I’m pleased to sign the Minimum Wage Amendment Act because it does just that,” said Mayor Gray. “A bill that raises the minimum wage for all is a much better vehicle for ensuring that all District residents who work hard earn a decent living.”

Mayor Gray also expressed hope that the law could be refined following the results of an Urban Institute study that he commissioned on how best to raise the District’s minimum wage without precipitating a negative impact on the city’s strong growth in private-sector jobs.”

19 Comment

  • justinbc

    I haven’t been able to find a copy of this online (too many similar name hits), but does anyone know if it also applies to service industry workers currently well under the minimum wage? (as is the case in California)

  • Great news for Walmart and other large businesses who can afford to pay their workers that much! Bad news for mom and pop.

    • Lots of mom & pops already pay over minimum wage, to reduce turnover. Short term employees are costly (unemployment insurance, training, and administrative set-up time), and disruptive to a small operation.

  • brookland_rez

    This makes a lot more sense than the LRAA. Kudos to Gray for having the will to veto LRAA and pass this much more sensible across the board hike for everyone.

  • brookland_rez

    The only issues with this I can think of are what’s to prevent businesses from locating across the river in VA with its lower minimum wage, and what’s to stop the higher paying DC jobs going to non-DC residents?

    • justinbc

      “what’s to prevent businesses from locating across the river in VA with its lower minimum wage”
      Well, in many instances, DC shoppers won’t go there to shop. There is no single store in DC that if it moved to Virginia I would drive there to shop, rather than just finding a more local alternative.

      • I think you’re a little overly dismissive of the question. Labor costs are a huge factor in the success or failure of small businesses. Increasing labor costs makes opening across the river a lot more attractive. Would I be worried that DC residents wouldn’t cross the river? Sort of. There are plenty of people in Virginia and Maryland to buy whatever it is I’m selling.

        • Especially if you’re selling a service to businesses, and not a retail product. Think commercial laundry (the people who provide kitchen towels and aprons to restaurants), accounting services, pest control, various kinds of contractors… Especially if it’s a business that requires a good amount of space, the ‘burbs are looking better all the time.
          That said, I’m still on board with the increase. My conservative parents are fond of saying “But no one’s SUPPOSED to live on minimum wage!” Doesn’t mean no one has to anyway. All our communities will benefit if people can live close to their jobs.

          • jim_ed

            While this is a valid concern, the fact is that these businesses have been leaving the city in droves for a while now, regardless of the minimum pay law. DC only has 68 sq miles to build on, and light industrial/warehouse space just isn’t a financially attractive or even viable for many landlords. This lack of space makes the rent higher on the remaining spaces, which means its already a whole lot cheaper to go out to New Carrollton or Springfield than it is to operate within the District. This law mainly concerns retail and service positions which should ostensibly stay put within DC

          • I don’t think anyone in commercial laundry, accounting services, or pest control are making minimum wage. If they are, this may increase costs of business a bit. I agree with above, more expensive are travel costs, and rent etc.

            This will primarily affect service workers, and those businesses clearly want to be in the district, because of the increasing prevalence of people of means to buy those services and products (Wal-Mart, McDonalds etc)

        • justinbc

          How am I being dismissive when I’m answering the question posed…? Regardless, you’re assuming your hypothetical business doesn’t already have a counterpart in the suburb you’re desiring to move to. If you’re a run of the mill laundromat (as in the example below), accountant, etc, chances are that’s not the case. You also have to consider that DC’s minimum wage was already higher, so the increase isn’t THAT much. Say you have 10 employees all making minimum wage, working 40 hours per week. Increase that by $1.25 and you’ve got $26,000 per year. Now, a little over $2,000 may seem like a lot on its own, but factor in the size of an operation with (at least) ten minimum wage employees and you’re probably talking about a decent sized business. Is that business going to make substantial enough profits by relocating to a suburb, versus a major urban center like DC? Even more telling is the mom and pop type places with only 2 or 3 employees, where the dollar amount will be much smaller. Would they really recoup that money? And if so why not just move anyway, regardless of the wage law?

          • Believe it or not, justin, your own personal dollars don’t make the District’s economy go ’round. The commercial laundry already has clients (in the District). Those clients don’t care where their towels get laundered, since delivery is included. Will their increased delivery costs outweigh the savings in labor and real estate? We’ll see, won’t we? Just bear in mind that many, many of the businesses we’re talking about here have nothing at all to do with YOUR shopping habits.

          • I think you’re being dismissive because you’re underestimating how additional labor costs will impact decisions, and how little DC resident lifestyle habits impact those decisions. I think this will most impact people who are considering opening a business, less so for those that are already here. I do agree with 1:39, I’m on board with the increases, but I am also worried that we’ll see even fewer quirky ideas.

          • justinbc

            Right, my specific dollars might not count, but unfortunately for businesses I’m not the only consumer in the world. There are many who share the same opinion, who do not own cars, who want to shop locally. Pack up your stuff and move if you think it’s better in the burbs, but again, why weren’t you there already?

  • It’s worth noting that Mayor Gray did not support this law. He commissioned an (ongoing) $500K study of the minimum wage, and didn’t want to move on an increase until the results of that study were in. He later supported an increase to $10 an hour with no inflation indexing.

    He’s signing this bill because his veto would be overridden and it’s an election year, but he did not support it before it passed the council.

  • I had read some scuttlebut that this legislation exempts union shops from paying the minimum wage to its bargaining unit employees (e.g., Safeway, Giant wouldn’t have to pay minimum wage, Trader Joe’s would). Anybody know if that’s the case, or am I mixing this up with the previous Wal-Mart bill?

    • It does not exclude union shops. You’re correct that the Wal-Mart bill (the LRAA) did. This bill applies to everyone the old law did – pretty much everyone but tipped employees.

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