Anticipated Business Reactions to a $15 Minimum Wage in Washington, D.C.

Abstract

This report features the results of survey of 100 Washington, D.C. businesses that would be affected by the $15 minimum wage proposed by Mayor Muriel Bowser. The survey, conducted between May 6 and May 19, 2016, asked D.C. employers about their experiences with recently-enacted minimum wage increases in the District, as well as their reactions to the proposed $15 requirement. (The Mayor has also proposed raising the base wage for tipped employees by 171 percent to $7.50 an hour.)

Over 80 percent of the surveyed businesses had 30 or fewer employees; the heaviest concentration of respondents came from Wards 1, 2, 3, 4, and 6. Over half of surveyed businesses reported that 50 percent or less of their affected staff members reside in D.C.; one in three businesses reported that fewer than 20 percent of their affected staff reside in D.C.

Among the key findings from the survey:

  • 48 percent of the survey respondent had already reduced staffing levels or employee hours to adapt to minimum wage increases in the District between 2014-16;
  • To offset the higher operating costs at a $15 wage floor, D.C. businesses said they would very likely:
    • Cut staffing levels (35 percent);
    • Reduce employees’ hours or their business hours of operation (37 percent), and;
    • Modify future hiring practices, selecting more-skilled or -experienced employees whose qualifications are commensurate with the higher wage requirement (31 percent);
  • Forty-four of the affected employers reported having tipped employees on staff; of these employers, 14 percent were very likely to eliminate tipping in response to a tipped wage hike, and another 27 percent were somewhat likely to do so;
  • One in five businesses would strongly consider moving across the river to Arlington, Va., where the minimum wage of $7.25 is less than half the rate proposed in D.C.;
  • Two-thirds of surveyed businesses agreed (and 50 percent strongly agreed) that the District is becoming less-friendly for businesses.