A $25 minimum wage proposal in D.C. could push some restaurant workers into Northern Virginia in the short term and, in the long term, potentially drive businesses to relocate as well, the head of the region’s restaurant association says.
The Restaurant Association Metropolitan Washington — an outspoken opponent of D.C.’s Initiative 82, which sought to phase out the tip credit for tipped workers — is opposing One Fair Wage’s proposal to raise the District’s minimum wage to $25 per hour by July 2029.
The proposal, which would put the minimum wage increase on the ballot in D.C., has won support from labor advocates seeking to make D.C. more affordable for the working class but criticism from business owners worried about going out of business or having to lay off employees. D.C. already has the nation’s highest minimum wage, at $17.95 per hour.
Shawn Townsend, president and CEO of RAMW, told ARLnow that tipped minimum wage increases have put a strain on restaurant owners already facing rising costs of doing business. He said many businesses have shared concerns about adapting to a $25 threshold.
“I think what most businesses are concerned about is for those who are already making $25 an hour above their peers or their colleagues at a specific business, those employees will now have to be bumped up a little bit higher, i.e., your managers or supervisors,” Townsend said. “So not only does it create a new floor, it creates a new ceiling as well.”
Townsend agreed with George Mason University professor Terry Clower that a $25 minimum wage would have a minimal effect on businesses relocating to Northern Virginia in the short term. However, the restaurant association CEO said D.C.’s restaurants may be forced to raise prices, which could lower foot traffic and tips.
“And once they start receiving less tips, then they will be looking for places to go where they can see their earnings get back to where they once were,” Townsend said. “I think in the immediate [term], it will be workers that potentially go to Virginia and Maryland, specifically Northern Virginia, where the restaurant scene is is thriving.”
In the long term, Townsend could see restaurants deciding to locate in places other than D.C.
“If restaurants realize that they cannot afford the increase in minimum wage and $25 an hour, they will look elsewhere to open their doors,” Townsend said. “So we will have restaurants closing in D.C. that can’t afford it, and we will also have restaurants who are interested in being in the region not looking to expand in D.C. proper.”
Townsend acknowledged it is difficult for minimum wage workers to live on $17.95 an hour — or even $25 — in this region.
“The conversation, I think, has shifted specifically towards wages, and I think that the conversation needs to involve other things that impact the affordability, and that’s housing, that’s education, that is workforce development and continuing to support the pipeline to blue-collar industries,” Townsend said.
D.C.’s $25 minimum wage measure cleared an early hurdle earlier in March when the D.C. Board of Elections determined the proposal is a proper matter for a ballot initiative.
The $25 ballot measure faces several more steps before it can go to D.C. voters. The measure must be circulated for a 10-day challenge period, and One Fair Wage must collect signatures from at least 5% of citywide voters in at least five of the eight wards within 180 days.
Virginia’s own minimum wage has increased beyond the federal $7.25-per-hour threshold since May 2021. Under the current law, minimum wage increases beyond 2025 are adjusted for inflation — resulting in a $0.77 increase on Jan. 1, 2026.
New legislation that passed the Virginia General Assembly and is headed to Gov. Abigail Spanberger’s desk seeks greater increases than inflation adjustments. The new proposed increases would gradually raise the state’s minimum wage to $15 by 2028. Spanberger had indicated she will sign legislation that increases the minimum wage.
