The minimum wage hike in Washington, D.C, is already devastating employment in the region and is linked to the largest loss of restaurant jobs in the last 15 years.
Officials raised the minimum wage in July of 2015 to $10.50 per hour, up from $8.25 since 2014. The Employment Policies Institute revealed in a May report that 48 percent of District businesses had already reduced staff or cut hours to deal with the increases since 2014. In the first six months of 2016, the restaurant industry in D.C. lost roughly 1,400 jobs, a historic drop for a six-month period, according to the American Enterprise Institute (AEI).
The restaurant industry in the suburbs outside D.C. grew by 2,900 jobs over the same period. The minimum wage rose again in the District July 1 to $11.50 per hour, and will continue to rise over the next four years to $15 per hour by 2020.
“This new report should serve as a warning to cities and states considering major minimum wage hikes like D.C.’s,” Jeremy Adler, AEI communications director, said in a statement. “The statistics don’t lie – they show a clear correlation between big minimum wage increases and jobs losses. It’s a reminder that there are serious consequences to these misguided labor policies, and that following D.C.’s example puts workers’ economic future at risk.”
Despite District officials flooring the gas on minimum wage increases, local business owners are very wary of the possible effects. Many are anticipating the law will result in higher consumer prices and less hours for employees. They also say employees will be laid off to factor in the higher costs to businesses.
“Stores are going to need to increase their product price,” Daniel Ahn, owner of Gallery Market in Chinatown, told The Daily Caller News Foundation. “Minimum wage per hour must be roughly equal to the average meal price.”
In the year since the minimum wage hike last July, employment in the restaurant industry grew by less than 1 percent in the District, despite increasing by 4.2 percent in Virginia and Maryland. D.C.’s restaurant industry has not lost jobs for five consecutive months in 25 years, according to AEI.
Many shop owners do not disagree with the concept of a minimum wage increase, but feel $15 is too sharp of a hike to keep up with.
“I think $15 an hour is a little extreme,” Ben, an employee at EnSTech LLC., a local repair shop on H Street in northwest D.C., told TheDCNF. “When it happens the owner will need to transfer the cost to customers. People complain about the prices already and shop around, so increasing prices would hurt the business overall.”
Some minimum wage employees in the city feel the increase is warranted, despite fears from shop owners and managers over the profit impact the new law will have. Living expenses in the city continue to rise and workers argue wages needs to go with it.
“It was long overdo,” Janae, an employee at Sports Zone shoe store in Chinatown, told TheDCNF. “We honestly haven’t talked about how it will affect our hours. If it cuts back on hours it would be a waste.”
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