Laboring Over Pay

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from CNN,

D.C.’s “living wage” proposal reinflates an economic debate.

Walmart and Washington have become the newest combatants in the war over wages. On July 10, the D.C. council passed a “living wage” bill requiring nonunion retailers with more than 75,000 sq. ft. of space and parent-company revenue of $1 billion or more to pay workers a minimum of $12.50 an hour. Guess which company fits the bill. In response, Walmart has vowed to cancel three planned Washington-area stores and halt construction on three others if the bill becomes law, leaving 1,800 jobs in the lurch.

Since Baltimore pioneered the idea in 1994, living-wage laws have spread to more than 140 jurisdictions. Washington Mayor Vincent Gray, who is mulling a veto, finds himself at the center of a long-running economic debate. Is a wage floor on labor a working-class savior or an albatross that prices unskilled workers out of the job market? The debate is now set within an economy that desperately needs both real-wage growth–there’s been none in a decade–and job growth.

Economists are split. In a recent survey of economists by the University of Chicago, a small majority said raising the federal minimum wage would make it harder for low-skilled workers to find a job. Yet a substantial majority thought it was worth raising the figure.

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