UMN-area businesses look to prepare for $15 minimum wage

Renewed debate over a minimum wage increase has business owners strategizing in case it passes

Owner Abdirahman Kahin help prepare orders during a lunch rush on Wednesday, Nov. 16, 2016, the second to last day of being open at Afro Deli's West Bank location in Minneapolis.

Bridget Bennett

Owner Abdirahman Kahin help prepare orders during a lunch rush on Wednesday, Nov. 16, 2016, the second to last day of being open at Afro Deli’s West Bank location in Minneapolis.

Emun Solomon

University of Minnesota-area restaurant owners are bracing for changes that could come with a potential minimum wage hike.

An effort by city leaders to put a minimum wage increase from $9.50 to $15 on the ballot was tabled after it was determined the change would have to come through Minneapolis city ordinance.

Still, sustained support from activists and Mayor Betsy Hodges has left local business owners strategizing ways to balance potential cost increases.

“I think that wage increases are inevitable over time,” Dinkytown Business Alliance president Randal Gast said, adding that if it passes, he’d like to see the change phased-in over the course of a few years.

A September 2016 study by The Roy Wilkins Center for Human Relations and Social Justice cited the food service industry — especially small businesses — to be among the top three industries with the largest number of people impacted by a wage increase.

The report estimated prices of food in Minnesota restaurants would increase by less than 5 percent to cover labor costs of a $15 minimum wage.

John Rimarcik, owner of Dinkytown mainstay Annie’s Parlor said he could have to switch to a self-service model in order to minimize food price increases.

“If there is an economic case that says it’s important to raise minimum wage … We’re all for it,” he said. “We just don’t want to see the local customer service industry suffer from it.”

However, other owners said they would rather raise prices than cut hours.

“The wage increases will just affect the customers,” Afro Deli owner Abdirahman Kahin said. “Our concern is not about the $15. Our concern is how much we would then have to sell a sandwich to students.”

Kahin said Afro Deli and many University of Minnesota-area restaurants rely on maintaining positive relationships with students.

For Dinkytown’s Kafe 421, increasing prices is a delicate balancing act, owner Jim Sander said.

The restaurant already relies on customers from outside the campus since students aren’t regulars, Sanders said.

“Most of our customers are from neighboring suburbs and would be turned off by increasing prices,” he said.