Luis Group Management, which owns 14 Dunkin’ Donuts shops in Montgomery County and employs about 300 workers locally, says raising the county’s minimum wage to $15 an hour would cause the company to stop opening new stores and close a production facility in Gaithersburg.
Boris Lander, a Luis Group partner, wrote in a letter sent Wednesday to County Council President Roger Berliner that the wage increase has the potential to eliminate 130 jobs at his company—46 at the production facility where doughnuts are made for its stores and 84 workers expected to be hired at five new stores planned for the county.
Lander urged the council to kill a proposed bill that would raise the minimum wage incrementally to $15 by 2020.
“We did not become involved in the prior minimum wage increase legislation, as we believed we could make adjustments to accommodate the increase,” Lander wrote. “However, further increases in the minimum wage will hurt our ability to compete on price, result in significant job loss, necessitate the closure of our production facility and cause us to cease our planned expansion in the county.”
The council is scheduled to debate the minimum wage legislation next week—and possibly vote on it as soon as Tuesday. The bill has five co-sponsors, meaning it has enough support to pass the nine-member council. However, some council members have urged the supporters to study the possible economic impact that raising the minimum wage to $15 would have on local businesses before voting on the legislation.
The federal minimum wage is $7.25, but in 2014 the county began raising the local minimum wage incrementally—to $8.40 in 2014, then to $9.55 in 2015 and to $10.75 in 2016. The minimum wage is scheduled to increase to $11.50 in July. If the new bill is approved, those incremental increases would continue until the minimum wage hits $15 in 2020.
Lander wrote in his letter that since the increases started in 2014, the company has eliminated about 70 to 100 full-time jobs at its stores in the county.
The business employs about 300 workers locally; about 75 percent are full-time and 98 percent are minorities.
“We pride ourselves on employing workers that other companies may not wish to hire due to language barriers or other reasons,” Lander wrote. “And those employees end up being among our most dedicated and are able to move up in the organization.”
Lander’s letter also said increasing operating costs in the county are leading the company to consider opening stores elsewhere in Maryland. For example, he said, the costs to operate a store in the county were 40 percent higher than the costs for a similar store in Howard County for the first 10 months of 2016.