For many D.C.-based restaurants, the hike in the minimum wage is killing them and causing the very people who thought they were going to get more money to lose hours and some to actually lose their job altogether.
Activists in Washington D.C. celebrated last year when the city council raised the local Minimum Wage from $8.25 to $10.50. They hailed it as just the beginning of the “drive for $15” and insisted that it was only the first step in giving minimum wage workers a “living” wage.
But in only the few short months since the hike in the wage, the Daily Caller reports that jobs have been lost and hours cut at many establishments and still other outlets had to close down entirely as a direct result of the higher business costs the new minimum wage law caused.
As the DC notes:
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).
Tellingly, the restaurant industry outside the nation’s capital grew by 2,900 jobs in areas where the wage is still lower.
As the D.C. wage continues to grow — the new law has it reaching $15 an hour by they year 2020 — it is likely that more jobs will be lost and more restaurants will be shut down.
“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 of the report. “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.”
The report from AEI isn’t an outlier. Another recent report found that jobs are being lost in many cities that have hiked their minimum wage requirements.
“Restaurant employment in metropolitan areas with cities that raised the minimum wage in 2015 has lagged behind employment in the rest of the states,” a report from late last year details. “This year restaurant employment in the metropolitan areas with major cities that raised the minimum wage only grew 1.1 percent through September. In the surrounding state areas, however, restaurant employment grew 2.8 percent.”
Indeed, the lesson has been costly in cities like Seattle where computerized order screens started to show up after a hike in the wage there and New York where the higher wage has negatively impacted school budgets.
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