The DC City Council has just adopted a measure to increase local unemployment and ultimately usher in more automation. Of course, they didn't quite phrase it that way.
As the Washington Post reports:
The D.C. Council unanimously approved a plan to ratchet up the city’s hourly minimum wage to $15 on Tuesday, and Mayor Muriel E. Bowser pledged to sign the measure into law, likely lifting low-income pay rates in the District to among the highest in the nation within four years.
The vote marked a victory for local and national unions, which targeted the nation’s capital more than a year ago for a symbolic victory in the “Fight for $15” campaign.
A final vote is required later this month, but that appeared to be a formality.
This is a hefty hike. The current minimum wage in the District is $10.50. It will hit $15 by 2020. Increases will be automatic and related to inflation after that.
Workers who rely on tips have a different arrangement under the new plan: these employees will see their base rate go from the current $2.77 an hour to $5 with employers required to make up the difference to get them to $15.
This creates an interesting dynamic: less able employees, the ones who do not give the kind of service that gets high tips, will actually become more expensive to hire than the best workers.
It is easy to imagine that tipped workers who do a middling job but in the past held onto their jobs long enough to improve and earn more, won't get that chance under the new regime: they'll be too expensive. The hotshot wait staff will simply serve larger areas.
Most employers know what having a service performed is worth to them. If government prices these services beyond what they believe them to be worth, they will look around for other solutions. Wendy's workers are already getting the boot because of minimum wage hikes.
The plan passed by the Council is slightly different from a proposed November ballot measure that is now moot. The ballot measure would have required employers to pay all workers, including tipped staff, $15 an hour. Restaurant worker representatives say they will still fight for ballot provisions.
Nevertheless Jaime Contreras, vice president of the Service Employees International 32BJ, had good words for the mayor and the plan passed by the Council:
Contreras credited Bowser and the D.C. Council for “pushing one of the nation’s highest minimum wages to help dig men and women out of poverty.” Leaders of the Local 400 of the United Food and Commercial Workers also said they backed the plan.
Actually, they will not dig men and women out of poverty.
They will make it harder to get and keep entry level jobs that prepare one for better jobs.
But members of the City Council probably get a lot of votes from people who fail to see the relationship of the cost of a service to somebody's willingness to purchase that service.
We want people to be paid well for their work, but we know that people who pay salaries evaluate what they can afford and still be able to supply jobs and also what the services of particular workers are worth to them.