Nearly half of Washington, D.C. employers said they have either laid off employees or reduced the hours of employees to adapt to the District of Columbia’s minimum wage hikes since 2014, according to a report from the Employment Policies Institute.
The minimum wage in the District of Columbia has increased from a $8.25 hourly rate in 2014 to the current rate of $11.50 per hour. Mayor Muriel Bowser advocated a $15 minimum wage in her State of the District address earlier this year.
"In recent months, the City Council in D.C. has considered enacting a number of new labor mandates, including a higher minimum wage, a bill that would fine employers for schedule changes, and a family leave policy funded by a tax on employers," the report says.
The institute surveyed 100 employers in Washington, D.C. to understand how they would react to a further minimum wage hike.
"Employers affected by the proposed increase to a $15 minimum wage were asked if they had either reduced the number of employees on their staff, or reduced the hours of current employees, to adapt to recently enacted minimum wage increases," the report says. "Nearly half of employers surveyed had already taken one of these steps—suggesting that 2014-16 minimum wage increases haven’t been absorbed through higher prices alone."
According to the report, just over half of the businesses surveyed said they planned to raise prices in order to offset the cost of a minimum wage hike. Thirty-five percent said they would likely reduce staffing levels and 37 percent said they would reduce employees’ hours or reduce the number of hours they were open for business. Thirty-one percent of businesses said they were very likely to hire more skilled workers in the future to offset the higher wage.
One in five businesses said they would move out of the District of Columbia and into Arlington, Virginia where the minimum wage is $7.25 per hour. Sixteen percent of businesses surveyed said they were somewhat likely to close their business if the minimum wage hike were implemented and 6 percent of businesses said they would likely close.
"These results are consistent with the best and most recent published research on the minimum wage, which finds that past increases (at lower proposed wage levels) have reduced employment for younger and less-educated employees," the report states.
"These proposed laws have encouraged a perception that D.C. is becoming less friendly for businesses," the report says. "Two-thirds of surveyed businesses agreed with this sentiment, with half strongly agreeing that D.C. is becoming a business-unfriendly city."
While Bowser did not comment on this specific report she said that there was consensus that a $15 minimum wage was the right thing to do for the District of Columbia.
"We are glad there is consensus around a $15 minimum wage and welcome the ongoing conversation on how best to support our workers, while creating an environment where businesses can start, grow, and thrive in all 8 wards," Bowser said.