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$11.50 minimum wage: Indexed for inflation, fierce critical response to passage

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An $11.50 minimum wage passage is prompting some fierce critical response from the public amid other stout supporters. Before being indexed for inflation, the city council of Washington, D.C., has formally approved this Tuesday to raise the minimum wage from a lesser $8.25 to a new $11.50. The considerable increase would not begin until 2016, though again not everyone seems happy with what consequences raising this wage to a more “living” one might yield. MSN provides the most recent updates to this major decision this Wednesday, Dec. 18, 2013.

The $11.50 minimum wage request was formally approved under a complete and total “yes” vote by the U.S. capital’s city council this week, and when it is effectively implemented, will make Washington D.C. one of the very highest minimum wage providers throughout the entire country as part of the area’s support to raise overall wage-rate pay hikes.

After the changes would go into effect less than three years from now (from the current hourly wage of $8.25 for workers), it would then be indexed for inflation. While many are supportive of this unanimous decision to vote in the bill and allow for the minimum wage increase, the impact that inflation might make in the capital’s economy — and in turn the rest of the nation — have other citizens less than pleased.

As stated in some comments by those concerned with the $11.50 minimum wage council approval and subsequent passage:

“I completely agree with you Nat. The blow-back effect of this minimum hike is simple, low skilled jobs will be cut substantially from small businesses. People automatically think of Walmart and McDonalds when they associate with the minimum wage, but 90% of the jobs out there, originate from small businesses. So that $3 hike per employee times 40 hours is another $120 dollars that a small business owner has to pay. If you sold pizza's for a business, think about how many more pizzas you'll need to sell in-order to make up the $120 per week if you sold them at $15 per pizza. Times that by 10 employees, now the small business is paying $1200 more per week in payroll expenses or $4800 more per month. Guess what, the company that sells you your flour, milk, eggs, and sauce are also having to pay their employees higher wages so now they will sell you these ingredients at a much higher price. This will force the business owner to do two things, raise their prices of their pizzas and lay off a few workers. Also, please note that the demand for pizza won't magically increase, so with the price hike, he'll very likely sell less pizzas. People will be laid off from these low skilled jobs which means unemployment will increase because now there are even less jobs out there. Also note, this $3 dollar hike will likely put these workers into another higher tax bracket which they'll earn much less than they are anticipating. Higher tax bracket means more taxable income for the government. it's another way for the gov to get more money. Force business to pay people more so they pay more taxes and gov gets more revenue.”

“It's too bad and too late. People who are on minimum wage shouldn't be supporting a family? Do you hear yourself? Since we've agreed over the years to subsidize businesses sending jobs overseas to lower labor costs, this is what's left for jobs to have to raise families on. If you have a business and hire employees you better factor in that your employees need a wage they can support themselves and maybe even others on. Even for people just starting out at work. They are usually around 18 and they to have to pay costs to live too. I know from experience having friends at 18 who didn't have the luxury of living at home. Why should they have to struggle at the expense of the corporation churning out dividends to its investors first. Pay the people and have some decency.”

Aside from this critical response, other political officials might have also not been fully behind this minimum wage hike. Although the Washington, D.C. Mayor Vincent Gray initially was against the $11.50 measure because he believed such a sharp spike in the minimum wage might negatively affect the inflation index and the labor market — he vouched for a lesser $10 an hour minimum wage instead — the council’s unanimous vote might pass over Gray’s previous veto of the bill.

“The federal minimum wage at this point in time is currently $7.25 an hour. The District of Columbia Chamber of Commerce has called for raising the minimum wage to $10 over three years and then indexing it to inflation. Once the higher pay takes effect, the three jurisdictions would form a region with 2.5 million residents and a minimum wage higher than any of the 50 states. Virginia, which borders Washington, requires employers to pay the federal rate.”

Other areas of the U.S. nation could also be affected by having an $11.50 minimum wage. Sonoma, California, provides its workers with the country’s very highest hourly rate, at over $15 an hour, while Washington state boasts the highest rate at $9.19 per hour.



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