Should The Minimum Wage Rise With The Cost of Living?

Should The Minimum Wage Rise With The Cost of Living? Mayor Gray Says No, The DC Chamber Says Yes!


In a letter sent last week to Mayor Gray and DC Council Chairman Mendelson, the DC Chamber of Commerce expressed support for an increase in DC’s minimum wage and to have the wage rise with the cost of living in the future. That’s encouraging, because it shows the business community recognizes the importance of making sure workers in DC can earn a decent living.


It's even more encouraging because the economist commissioned to study the issue by the Chamber, David Neumark, is a reliable critic of increasing the minimum wage. His new report acknowledges research support from another organization aligned with that way of thinking, the Employment Policies Institute. Nevertheless, Neumark's report acknowledges many ways in which a minimum wage increase would help low- and moderate-income DC residents, and as noted, the Chamber ultimately recommends a minimum wage increase.


Neumark recommends that the minimum wage rise with the cost of living by tying it to the Consumer Price Index. Right now, DC’s minimum wage is frozen, which means that purchasing power of the wage declines each year. Neumark advocates for the minimum wage to be indexed to the CPI for several reasons. For businesses, indexing creates a steady, predictable wage increase and eliminates the economic shock that comes with sporadic bumps in the minimum wage.