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With Minimum Wage Hike, Some D.C. Workers Could See $1,500 In Extra Pay

By 2016, the minimum wage in D.C. will increase to $11.50.
By 2016, the minimum wage in D.C. will increase to $11.50.

Half of the minimum wage workers in D.C. will see their annual earnings increase by over $1,500 per year by 2016, the year that the city's minimum wage hits $11.50.

The finding comes in an assessment from the Urban Institute on the minimum wage hike in D.C., which was passed by the D.C. Council late last year and is being phased in over three years. Last month, the minimum wage increased from $8.25 to $9.50, and will jump to $10.50 next year and $11.50 in 2016. After that, it will be indexed to inflation.

The assessment finds that the wage hikes will affect 41,000 people who live and work in D.C. Of those, one out of five affected workers live in families below the federal poverty line, while 35 percent are in near-poor families and 25 percent in middle- to upper-income families.

Among affected workers, 24 percent will see $500 in extra wages, 26 percent will take in between $500 and $1,000, 20 percent will earn an additional $1,500 to $2,000, and 30 percent will see over $2,500 in additional wages.

The breakdown of how much D.C.'s low-wage workers will make.

"Our simulations conclude that D.C.'s new minimum wage of $11.50 an hour in 2016 will, on average, result in modest increases in income for most low-income workers who live and work in D.C. and small declines in participation and associated costs of most public assistance programs available to D.C. residents," concludes the assessment, which was authored by Gregory Acs, Laura Wheaton, Maria Enchautegui, and Austin Nichols.

According to the assessment, an unmarried worker without children made $17,160 at last year's wage of $8.25 an hour, and by 2016 they will see an increase of $6,760, to $23,920, in annual earnings. After benefits and taxes, their total increase will come to $3,958, a 25 percent jump. A single parent with two children will see the same total increase in earnings, though with taxes and benefits taken into account, their annual income will go up $1,328, or four percent.

The report finds that the impact of the wage hike will be limited in part by the fact that D.C. is already a high-wage city, and that in many cases the market has already pushed wages for some low-wage workers to $11.50 or above.

It also concludes that job losses due to the wage increase likely won't top one percent, and that some affected workers will see small decreases in existing benefits like food stamps and welfare. Caseloads for D.C.'s food stamp program, SNAP, would decrease by two percent, while assistance for heating payments would drop 3.5 percent.

The Urban Institute's assessment concedes that a limiting factor in the minimum wage hike is the fact of the workers that will be affected, only 38 percent both live and work in D.C. Still, say the researchers, some of those live in D.C. and work in Prince George's and Montgomery counties, both of which are increasing their minimum wage to $11.50 by 2017.

Despite the increases, some advocates say that the region is still becoming more unaffordable for many low-wage workers. According to a report by the D.C. Fiscal Policy Institute, median wages for workers without college degree have fallen since the recession ended.

Various groups are still pushing for ballot initiatives that would push the minimum wage hike another dollar, to $12.50. Some advocates have also argued that the increases should apply to tipped workers.

DC MW Report Embargo by Martin Austermuhle


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