Multiple restaurants in Washington, D.C., could shutter by the end of the year following the city’s change in minimum wage policy.
Restaurant Association Metropolitan Washington data collected from over 200 restaurants in January and February suggested that 40% could close before the end of 2025. This comes after the city passed Initiative 82 in 2022, which changed the $5.35 minimum wage for tipped workers, including restaurant servers and bartenders.
“Couple years ago, Initiative 82 passed, and we’ve seen an increase in labor costs,” Eric Heidenberger, co-owner of D.C. Restaurant Group, said. “You put all that together, it’s been an extremely challenging time. We’ve been around for 45 years. We’ve never seen a stretch like this in our history.”
D.C.’s base minimum wage is also set to increase on July 1 from its current minimum of $10 an hour to $12 an hour, a 20% increase. Last year, 74 restaurants in Washington, D.C., closed their doors, a record for the district.
“I think everyone is concerned,” RAMW President and CEO Shawn Townsend said. “These are real issues for everyone, regardless of what category of restaurant you fall in. The margins are already super thin in the restaurant industry, whether you are five-star or a sandwich shop downtown on M Street.”
The possible closings could also be tied to D.C.’s projected decrease in revenue, which comes as President Donald Trump and the Department of Government Efficiency cut jobs in the federal government. D.C.’s Chief Financial Officer Glen Lee has predicted the city could lose 40,000 jobs over the course of a few years, translating to a $342 million annual revenue decline.
Trump’s proposed tariffs on nations such as Mexico and Canada could also affect the district’s restaurant industry since both countries provide the necessary goods the businesses sell to customers. Cork Wine Bar & Market, for instance, has conducted a “tariff sale” on its wine to make room in its store so it can buy its merchandise in bulk before tariffs cause a price hike. Trump’s tariffs are set to go into effect on April 2.
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“The only option we have is to stock up and hope to be able to run with that wine as long as we can to ease in some pricing changes,” restaurant co-owner Diane Gross said.
The Washington Examiner has contacted RAMW for comment.