Two weeks ago, the D.C. Council took an important step to address the very low wages paid to DC’s retail workers, by approving a bill — on first reading — to give workers for large retail stores a living wage of $12.50 an hour. The Council will hold a second reading and vote on this bill on Wednesday, and we hope it will reaffirm its support for the Large Retailer Accountability Act.
Efforts to raise wages for DC’s working poor important to ensuring that the District remains affordable and that the benefits of DC’s economic boom are widely shared. DC residents working in retail are three times as likely as other workers to be poor. Raising wages even modestly could make a big difference. Full-time work at 12 dollars an hour would lift about two-thirds of DC’s working-poor families out of poverty — and would be enough to help a family move off welfare entirely.
The District’s economy also would benefit, because lower-wage workers spend their earnings at local businesses. Higher wages will go right back into the local economy, creating more jobs.
There is no easy explanation for the low wages in retail. Even after taking into account factors such as education level and age, workers in retail in DC earn one-third less than other workers. Nationally, worker productivity in retail grew faster over the past decade than in the overall economy, yet the average retail wage fell after adjusting for inflation.
Opponents say that this will hurt retail in the city and lead to fewer jobs for the very people the legislation is intended to help. Yet the business-backed analysis they cite has been discredited by economists, who, instead, find that raising minimum wages leads to higher take-home pay without causing job losses. One key economist cited by the bill’s opponents issued a statement that his research had been badly misinterpreted. Moreover, living wage opponents offer no alternative — and no solution to the fact that an entire industry is built on poverty-level jobs.
And they don’t have an answer to the question of how some retailers, such as Costco, can pay wages well above industry norms and still be wildly successful. Costco, whose parking lot at its recently opened store in Northeast DC always seems full, understands the benefit of paying living wages to its workers who are the public face of the company to customers. Its starting wage is at least $11.50 an hour, and company officials report an average hourly wage of $20 helps keep good employees and prevents high turnover.
The Large Retailer Accountability Act comes at a time when the District is experiencing a population boom, and when development in many neighborhoods is attracting national retailers. Many national retailers want to be in DC because of our thriving economy. The DC Council should act to ensure their workers can afford to live and thrive in our city, too.
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