When Ron Newmyer closed his family restaurant for good right before the July 4th holiday, it marked the end of a popular restaurant that had been serving customers in the Silver Spring area since 1989.
Newmyer blamed several factors that led him to shuttering Armand’s Chicago Pizza on Seminary Road, including the County’s decision to increase the minimum wage each year between now and July 2022.
“I’m not going to blame our closing on that, because we made plenty of mistakes,” Newmyer said. But, he added, the mandatory wage increases “makes it exceedingly difficult” for small businesses to succeed.
The Montgomery County Council, in a move spearheaded by Council member Mark Elrich, the Democrat’s unofficial candidate for County Executive, voted to increase the minimum wage annually until it reaches $15 an hour.
Executive Ike Leggett signed the bill into law in November of last year.
As of July 1, employees who work at a business with 51 or more employees will receive $12.25 an hour. Businesses with fewer employees must pay $12 an hour.
In one year, the rate will jump again. As of July 1, 2019, the minimum wage for those working in companies with at least 51 employees must be paid $13 an hour. For smaller businesses, the rate increases to $12.50 an hour.
Pay increases for minimum wage workers will continue to increase through July 1, 2022.
Newmyer is not against increasing the minimum wage, but he just wished the hike could have been enacted more fairly, he said. “I’m not anti-minimum wage, but it’s not a one-size-fits-all,” he said.
“Taxes aren’t applied” equally across the board so why must the minimum wage, he asked?
The new law should treat mom-and-pop stores differently than large corporations, he suggested.
“I’m sure that we won’t be the only business” that goes under following the increase in minimum wage, he said.
Richard Gorinson, owner of J&S Shoes in Wheaton, said his store manager of 18 years recently quit due to the minimum wage increase.
The woman made $16 an hour, but with sales bonuses, was bringing home more like $19 an hour, he said.
However, when she heard that new employees with no experience would be making basically the same base salary as her even though she has worked at the shoe store for 18 years, she decided to move on, he said.
“This is a sales job. The income has to be based on the sales of the store,” said Gorinson,
Fortunately, said Gorinson, “business has been up in the past 12 months.”
Even so, due to the minimum wage increase, “I am scheduling less people that I did in 2016 and 2017.” Also, he said, “I am very reticent of hiring new people.”
Gorinson would have preferred that an increase to the minimum wage take place six months after a new employee started working.
“It kills me to spend that kind of money” on someone who needs to be trained. “In my industry, people are not productive for a minimum of six months,” said Gorinson, who has owned the Stride Rite shoe store since 1990.
Gorinson pointed to McDonald’s restaurants, which increasingly has been adding kiosks for customers to input their orders, thereby reducing the number of employees needed, he said.
Costco Wholesale, which has locations in Wheaton and Gaithersburg, won’t be increasing wages for its workers.
The starting wage for employees at the members-only warehouse club is $14, which is $1.75 more per hour than the new County minimum wage.
“The new minimum wage in Montgomery County, Md. has no impact on Costco’s operations,” according to a corporate spokesperson.