DC Mayor Should Veto Super Minimum Wage

Washington, DC Mayor Vincent Gray has an important choice to make in the next few days. He could sign a bill mandating that Walmart and other large retailers pay a ?super minimum wage? of $12.50 per hour, $4.25 above the city?s minimum wage, or veto it. Doing the former would hang a ?Sorry, We?re Closed? sign outside our nation?s capital.

At a press conference on Tuesday, Mayor Gray said he hadn?t even looked at the bill, let alone made a decision. This puzzled Craig Shearman, a vice president of the National Retail Federation. Given Washington?s economic predicament, he wonders why Mayor Gray would consider signing it:

The truth is that Washington is in desperate need of jobs regardless of what they pay. As of July, the District had an unemployment rate of 8.6 percent. That compares with 7.1 percent in Maryland and 5.7 percent in Virginia, the two states that surround the city.

In a tweet during his press conference, Mayor Gray worried that sequestration, automatic federal budget cuts, were impeding the city's job growth:

An answer to more job growth is giving the private sector a reason to build and invest in the city, but a super minimum wage would be counterproductive. In an op-ed in the Washington Post, a?Walmart representative said the company will stop building three stores under construction and reconsider plans to build three more, meaning fewer job openings for unemployed DC residents.

In a July commentary on the topic, U.S. Chamber President and CEO Tom Donohue, noted:

Economic studies have shown that mandatory wage hikes price the lowest skilled workers out of jobs. If companies are forced to pay an arbitrarily higher wage, they will seek workers with skills to match.

The local Washington Post also opposes the bill, calling it ?so small-minded that it actually would have the effect of depriving the city, including struggling neighborhoods, of desperately needed new jobs.? The editorial continues:

The bill would do nothing for the vast majority of hourly workers, including some who work for the city government, and the creation of an uneven playing field would likely discourage new businesses from investing in the District. That, in turn, would mean fewer jobs, fewer retail choices and higher prices for residents.

In short, mandating a higher wage will end up hurting the people the bill intends to help.

Mayor Gray has until Sep. 13^th to decide if Washington, DC wants to roll out the welcome mat and be attractive to retailers or is willing to sacrifice much-needed jobs with a stroke of his pen.

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Source: http://www.freeenterprise.com/economy-taxes/dc-mayor-should-veto-super-minimum-wage

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