By Ian Simpson
WASHINGTON (Reuters) - Washington's city council on Tuesday approved raising the minimum wage to $11.50 an hour, one of the highest rates among U.S. cities and part of the wealthy region's push to hike base pay.
The minimum wage in the U.S. capital would rise in 2016 from the current $8.25, and then be indexed for inflation. The council gave unanimous final approval to the measure, which it first passed two weeks ago.
Democratic Mayor Vincent Gray has opposed the measure, saying it is unclear how it would affect the labor market, and urged an increase to $10 an hour instead. The unanimous vote means the council could pass it over Gray's veto.
The council coordinated raising the base wage with lawmakers in Montgomery and Prince George's counties, in Washington's Maryland suburbs. They approved similar measures last month.
Once the higher pay takes effect, the three jurisdictions would form a region with 2.5 million residents and a minimum wage higher than any of the 50 states. Virginia, which borders Washington, requires employers to pay the federal rate of $7.25 an hour.
Some business groups said the measure was ill-advised.
Jim Dinegar, the president and chief executive of the Greater Washington Board of Trade, told Reuters the higher wages would make the capital and the region less attractive to business, especially since Virginia's rate remained unchanged.
"They think they're doing this in a vacuum. They're not," he said of the council's vote.
Another business group, the District of Columbia Chamber of Commerce, has called for raising the minimum wage to $10 over three years and then indexing it to inflation.
Washington state has the highest hourly minimum wage among U.S. states at $9.19 an hour. Among city workers, those in Sonoma, California, enjoy the highest rate, at $15.38 an hour.
Gray had vetoed a bill this fall that would have required Wal-Mart Stores Inc. and other big retailers to pay a 50 percent premium over the city's current minimum wage.
The pay hike comes after fast-food workers went on strike this month across the United States as part of a campaign to raise pay to $15 an hour.
The city council voted as the region emerges relatively unscathed from the recession and with the capital's economy and population growing.
The Census Bureau reported last week that eight of the 13 U.S. counties with the highest median income last year were in the Washington area.
(Reporting by Ian Simpson; Editing by Dan Grebler)