Minimum wage increase has immigrant small business owners fretting

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Sanjay Bhadu, owner of Jucivana Smoothies and Coffee on Yesler Ave says even with just one employee, minimum wage hikes will threaten his business. (Photo by Senhao Liu)

Sanjay Bhadu, owner of Jucivana Smoothies and Coffee on Yesler Ave says even with just one employee, minimum wage hikes will threaten his business. (Photo by Senhao Liu)

Monday’s historic city council vote unanimously approving $15/hour minimum wage was meant to reduce growing income inequality in Seattle.

But one group has been particularly outspoken in opposition to the wage hike — immigrant small business owners.

“I think it is unreasonable. The cost of my restaurant is rising rapidly and I nearly do not earn money now,” said Jason Lee, the owner of the China First restaurant in the U District. “If it rises, I will definitely cut current positions and condense in all kinds of ways.”

Other small companies — from mom and pop restaurants to Subway franchises to small stores — have all voiced similar concerns and complaints about the new minimum wage, projected to be the highest in the country once implemented. They claim having to pay their few employees the increased wage will be a severe financial challenge, leading to tougher living conditions for the owners themselves, or even the closure of their businesses altogether.

“The increase may make my business close,” said Sanjay Bhadu, owner of Jucivana Smoothies and Coffee. “At least I will reduce hours of full-time employees and increase drinks’ price.”

Bhadu came to the U.S. from India 17 years ago seeking the American Dream. His drive-up juice bar in the international district now has just one full-time employee other than Bhadu. But after years of hard work, he said that he hasn’t seen that dream come true, and has even thought about moving back to India with family in the future.

Barring that, Bhadu says he plans to pass the extra cost of a higher minimum wage directly on to his customers.

(Chart courtesy Seattle.gov)

(Chart courtesy Seattle.gov)

“I am not sure when it will go in force, but whatever the date I have to pay my employee $15 is when I will increase the prices on juices and coffee,” Bhadu said in a follow email.

According to the City Council bill, large companies with over 500 employees must reach $15/hour by 2017. But smaller companies with less than 500 employees have five years — until 2019 — to gradually reach that level.

Bhadu agrees that the gap between the rich and the poor in Seattle is widening, and that that’s a problem. But as a small business owner he counts himself in the latter category, and says the bill will mean working longer hours himself, taking him away from his family more.

Immigrants running other small businesses in Seattle echoed his sentiments and mentioned the rapid rise of other costs in the city, beyond just labor, as cause for concern.

Of course, cost of living is rising for employees as well — that’s the main reason the higher minimum wage was proposed in the first place.

Employees will doubtless appreciate the higher wages, but if business owners’ threats of downsizing or going out of business hold true, they may face losing their jobs altogether.

“I understand the boss’s difficulty, and I think a little increase on the minimum wage will be okay.” said Patty Zhang, an employee of the China First restaurant in the University District. “But too much increase is not good for both my boss and me.”

Patty Zhang, who's worked as a dishwasher at China First restaurant in the University District for 30 years earning minimum wage. (Photo by Senhao Liu)

Patty Zhang, who’s worked as a dishwasher at China First restaurant in the University District for 30 years earning minimum wage. (Photo by Senhao Liu)

Zhang has worked there for nearly 30 years — the only job she’s held since immigrating to Seattle from China. She currently makes the state minimum wage of $9.32 per hour, bringing her monthly income to around $1100, plus some tips.

Her wage when she started the job back in 1985?

$2.25 an hour.

Senhao is a host at the Chinese Radio Seattle for news broadcasting and talk shows. He is also a voiceover person for one of the most popular TV programs, the "Legal Report", in China, which has over 10 million viewers. He is a Journalism student at the UW and he comes from China.

7 COMMENTS

  1. The law of unintended consequences strikes again. Since WalMart and other major corporations can absorb the increased labor cost, small businesses will die. It makes no sense to work, if working cost you money

  2. the workers who work for Walmart in Mexico only make $1.75 a hour and pay the same price for the same stuff. So where do you think the BIG Corporations will move their job to Seattle or Mazatlan were you start out at $0.75 a hour?

  3. These immigrants who are here illegally should not even be complaining BECAUSE they are here illegally and should not be here. So number one they should NOT be here and then they would not have to worry about paying the $15 minimum wage. As for the immigrants who are LEGALLY here, if they don’t like the new law, they can move to a state where the minimum wage is less like New York or New Jersey etc.

    • Peter, this article doesn’t even mention undocumented immigrants and there’s no reason to assume any of the small business owners or employees quoted in it are in the country illegally.

  4. Does anyone think small businesses in Seattle will be helped by this new $15. Minimum wage? Exactly, how does that work?

  5. What is the dollar amount that a wage should be? When I started working, minimum wage was $3.35/hr. When it rose, people cried that small businesses would go under. Same when it rose again. And again.

    There is no adjustment, up or down, that would be met with approval by all. So I shrug, and figure that, as with everything else, life will go on. It always has, it always will. I’ve been quite poor, I’ve been situated squarely in the middle class bracket, and ho-hum, nothing really changes.

  6. Does the minimum wage increase include any sort of reduction in B & O taxes? You’d think a decrease in taxes for small businesses would be implemented to ease the burden on them.

    On the other hand, some small businesses going out of business as a result of this isn’t always a bad thing. If you can’t afford to pay fair wages to your employees, then your business will go under and be replaced by one that can. Owning a business doesn’t automatically make you a good businessman.

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