DC Businesses Wary Of Minimum Wage Hike, Fear Layoffs And Higher Prices

By Steve Birr

Officials in Washington, D.C., are moving ahead with a steep increase of the minimum wage, but local business owners fear the law will likely result in higher consumer prices and less hours for employees.

“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.”

The D.C. Council approved the Fair Shot Minimum Wage Amendment Act of 2016 on June 7 raising the rate in the District from $11.50 per hour to $15 dollars per hour by 2020. Mayor Bowser signed the proposal into law June 27, requiring businesses to hike hourly wages 70 cents a year through 2020. The bill also raises hourly wages for tipped workers from $2.77 to $5 per hour by 2020, reports The Washington Post.

Local business owners are planning for the financial impact on their stores and said employees will likely need to be laid off to factor in the hire costs to businesses.

“I don’t know how retail stores will survive,” Ahn said. “If the wages increase, owners will just keep the best employees and fire the other ones so they can still provide the best quality product. I think unemployment will go up.”

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. The minimum wage already rose July 1 in the District to $11.50, 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.

“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 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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