Washington, D.C. will lose thousands of jobs as the district's plan to raise the minimum wage to $15 goes into effect, while the higher wages will primarily benefit workers in the surrounding suburbs, according to a new report by the city's chief financial officer.
D.C. Mayor Muriel Bowser spearheaded the effort for a $15 minimum wage, more than double the federal minimum wage of $7.25 an hour. Analysis by the city's Office of Revenue Analysis, however, says the plan could cost the district 2,500 jobs by 2026, the Washington Times reports.
The district's minimum wage is currently $11.50 an hour and each year will grow by 70 cents until it reaches $15 in three years. After 2020, the minimum wage will grow based on inflation.
The report also states that suburbs in Maryland and Virginia will benefit from the wage hikes as more businesses move there.
Bowser's spokesman, Kevin Harris, defended the mayor's position.
"The mayor still believes that raising the minimum wage was the right thing to do and a key component of the administration's efforts to create more inclusive prosperity for all residents," Harris told the Times.
Harris also said criticism that jobs will move out of D.C.'s borders is not new.
"The answer isn't to keep wages low, rather it's to make sure we are doing more to provide residents with the skills and access they need to the job growth occurring in our city," Harris said.
Many people in the suburbs commute into D.C. for work. Some fear that the wage hikes will case more of those commuters to try to gain higher-paid employment in D.C., competing with district residents. Additionally, some of the jobs may leave D.C. and move to where the commuters already live in the suburbs.
D.C. passed a measure to raise the minimum wage to $15 for hourly employees in June. Critics immediately castigated the law at the time.
"Unfortunately, it's employees and small businesses who will pay the tab," Michael Saltsman, research director of the free market Employment Policies Institute, told the Washington Free Beacon at the time.
D.C. restaurants lost 1,400 jobs in the first six months of 2016 and experienced their worst hiring period in 15 years. Suburbs in Virginia and Maryland added nearly 3,000 jobs over the same period.