The Washington, D.C. City Council voted unanimously to raise the city’s minimum wage by 40 percent to $11.50 Tuesday — well above the federally mandated $7.25.
The move came while D.C.’s unemployment rate hovers uncomfortably at nearly 9 percent — 1.5 points above reported national-unemployment levels.
In collaboration with neighboring Maryland counties, which passed similar measures in the past 30 days, the level puts the area above any other state’s minimum wage in the country, The Washington Post reports.
While the hike may help some minimum-wage workers in the district, businesses unable to afford the hike will be forced to lay off employees, likely adding to the already high unemployment in Washington. Maryland, for example, has a reported unemployment rate of 6.7 percent, while Virginia has an unemployment rate of 5.6 percent. Virginia did not collaborate with the D.C. City Council’s efforts.
The move is poised to harm teen unemployment especially. Teenagers, who often have fewer skills and so work in minimum-wage jobs, have been hit especially hard by the recession. The national unemployment level for black teenagers, for example, at 36 percent. A little over half of D.C.’s population is black.
“Study after study reveals that there are long-term career benefits to working as a teenager and that these benefits go well beyond the pay that these youths receive,” according to a 2009 op-ed in the The Wall Street Journal.
“A study by researchers at Stanford found that those who do not work as teenagers have lower long-term wages and employability even after 10 years,” the op-ed continued.
“While it may not sound like a huge deal to raise the minimum wage by a buck, that dollar, multiplied thousands of times, adds to up to huge costs for businesses,” free market organization Generation Opportunity posted in August. “Even if businesses wanted to reward diligent, hard working young people, a higher minimum wage may reduce the amount of bonuses or raises that a business can give out because money is being used elsewhere.”
DC Brau, the first brewery to open in the district in decades, had collaborated with the city to raise the minimum wage to $10.25, The Post reports — 24 percent increase above current levels and a full $1.25 below what the council approved.
Though the vote is not yet final in D.C., with unanimous support it is likely that Democratic Mayor Vincent Gray will approve the measure next year. Gray has said he preferred a more modest raise to $10 an hour — a 15 percent increase.