In early June, D.C. officials promised a $15 minimum wage for low-income workers, according to the Washington Post. The “Fight for $15” movement has been campaigning for years, rallying for higher wages in American businesses across the country.
The movement has seen victories in New York, California, Illinois, Massachusetts, Pennsylvania, Washington, North Carolina, D.C., and other states and territories, according to the National Employment Law Project.
The most recent of the campaign’s successes, that of Washington, D.C., presents a significant potential shift in the area’s economy. The concept has sparked mass debate because of the potential effects of higher wages.
Expatistan states that Washington, D.C. is the third most expensive city in the United States. With D.C.’s high cost of living, the raise in wages opens a world of possibilities for impoverished individuals and low-income households; however, the raise could also lead to the downfall of several local stores or restaurants, critics claim.
Katrina Jenifer, supervisor at a Tenleytown Best Buy, says that the raise in wages won’t significantly affect some established businesses like Best Buy. According to Jenifer, since most Best Buy employees are already earning more than minimum wage, the staff will see hardly any effect.
Whereas larger businesses such as Best Buy may not be put under pressure after the wage raise takes effect, many speculate that chains like McDonald’s may feel the strain since many of their employees are paid minimum wage.
Jenifer suggests that employees at smaller businesses such as restaurants or supermarkets will be more affected by the wage raise, meaning people of all ages will be exposed to the benefits and drawbacks of the change.
“The typical minimum wage worker is not a high school student earning weekend pocket money,” the United States Department of Labor found. The department says 89 percent of people who would be affected by the wage rage are 20 years or older.
Defenders of the wage raise use this as a main reason to support the change–adults with low-income jobs will be able to better care for their families.
“…the current minimum wage leaves too many families in poverty,” says Heather Boushey of the Washington Center for Equitable Growth. “[Earning federal minimum wage] puts a single adult just barely above poverty. But if that worker has to support any other people—such as a child—then this family would be living below the U.S. poverty threshold.”
At the beginning of 2016, the lowest state minimum wage was $4.63 (average of federal and state minimum wage) in Oklahoma, according to the National Conference of State Legislatures.
A full-time worker earning the federal minimum wage and working 40 hours a week would have an annual salary of $15,080. The average annual cost of living for a single adult in America is $28,474, CareerTrends says. Many argue that federal minimum wage is not enough to live on.
The visual above displays the comparison between annual income and cost of living in the U.S. The data assumes that all adults earn federal minimum wage and work 40 hours a week.
Local businesses that cannot afford to pay their workers more than the current federal minimum wage may suffer if their states vote to raise the wage. Management at the Blue Scoop, a locally owned ice cream shop in Delaware, feels that a wage raise would be too much for their business to handle.
Support a living wage but raising minimum wage in DE to over $10 an hour? My small seasonal business will have a hard time absorbing that
— The Blue Scoop (@thebluescoop) March 7, 2016
Washington, D.C.’s minimum wage will be gradually rising in the future, reaching $15 by 2020 according to the Washington Post. Economic effects will follow.