Bad news on minimum wage front

Commentary

By Deborah Simmons - The Washington Times - Thursday, March 23, 2017

OPINION:

Well, the results are in: D.C. residents are going to be whacked by the minimum-wage bully stick.

The wage increases begin kicking in on July 1 and by the time they hit the $15 mark in 2021 new analyses offer several apolitical realities, projections that should have been highlighted during legislative and City Hall deliberations.

Here’s the reality of the crapper situation from none other than the D.C. Office of the Chief Financial Officer.

1) D.C. residents lose jobs because out-of-staters, i.e. commuters, already have the upper hand.

“The commuter effect is the main reason that DC residents will lose 82% of all jobs lost in DC due to the minimum wage increase. Our model predicts by the year 2026, 2,489 total jobs will be lost, with 2,046 of those jobs previously being held by DC residents. Without the commuter effect, our model still estimates that there would be job losses as businesses and consumers react to changes in prices due to the minimum wage increase, but the commuter effect concentrates the losses on DC residents.”

2) Who wins, who loses? “Most of the impacted District residents (those earning between $8.25 and $18) will see an increase in their wages over the baseline of up to $5,100 in 2021 (one year after the policy hits the $15 per hour mark).

“About 1,200, or 2% of the 61,000 residents, however, may face job loss by 2021. This number increases to (and caps out) at around 2,000, or 3.4%, by 2026.”For all DC residents impacted by the minimum wage policy (including those who lose their job), net total earnings in the city increase by about $140 million in 2021. There’s about $190 million generated in new earnings by the higher wage, but $40 million is offset by those who lose their jobs and another $12 million is lost by those earning above the minimum wage who see a slight slowdown in subsequent wage growth as employers try to shift some of the new, higher labor costs.”