Washington, D.C.'s city council has unanimously approved a substantial hike in the city's minimum wage. Starting in 2016, workers there will be paid no less than $11.50 per hour. After that point, regular increases to the minimum wage will be indexed to inflation.

Notably, the measure passed despite opposition from the city's mayor, Vincent C. Gray, who supported a more modest increase to $10/hr. The unanimity of the council's decision is enough to overcome any veto, so the mayor's displeasure will not stop implementation of the new wage.

The district's new minimum wage is among the highest in the country, even though it falls far short of the $15/hr for which fast food workers and activists have recently demonstrated. The measure provides minimum wage workers an increase of a full $4.25 per hour over the federal minimum wage, which is currently set at $7.25. Historically, however, $11.50 is not significantly out of line with federal pay minimums. Adjusted for inflation, the federal minimum wage in 1968 was equivalent to a little over $10.50 in today's dollars.

Some business leaders claim that the increase in minimum wage will actually hurt the district's city workers by limiting the ability of employers to hire and forcing jobs into surrounding communities that lack such wage protections. Jim Dinegar, the president of the Greater Washington Board of Trade, has pointed out that neighboring Virginia only mandates that employers pay the federal minimum. He accuses the D.C. city council of acting as if they were in "a vacuum" and worries that the wage differential will give Virginia businesses a competitive advantage.

Councilmembers, laborers and their supporters, however, don't have to look far to dispute Dinegar's assertion. The wage law has been very much tailored to its conditions. Similar measures have been passed in the district's adjacent Maryland suburbs, creating a large and densely populated contiguous higher-wage region.

It is also worth noting that the wage increase comes on the heels of the defeat of a proposal to raise wages only on Wal-Mart and other large retailers. Councilmembers ultimately felt that a unilateral increase was more fair and benefitted a greater number of workers.

Besides, business people may be wise to begin supporting measures like the one in D.C. Economists largely agree that ever-growing income inequality is creating a drag on the U.S. economy, undercutting the kind of broad-based prosperity that bolsters increased consumer spending and, ultimately, profits for businesses.