As the minimum wage goes up, some small businesses downsize

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It’s July, which means LA’s minimum wage is going up again, for the third year in a row.

The city has been increasing the minimum wage incrementally until it hits $15 per hour. This year, it goes up to $14.25. Businesses with fewer than 25 employees get an extra year to comply. The wage increases to $13.25 for them.

Gregory Travis has been working at Harissa Restaurant in the heart of the Pico-Robertson Jewish neighborhood for four years. He says the minimum wage needs to be higher to keep up with housing costs.

“The minimum wage needs to be at least $15,” he says. “I look around where I live, I’ve seen the rent go up from $800 a month for a single four years ago to $1350, I’m literally seeing families down the hall in a single, a family of five.”

But small businesses like Harissa are struggling to keep up. Owner Alain Cohen had to close the business for lunch to keep up with rising expenses.

“All of this creates a stressful financial situation and the reaction to that is to reduce expenses. So what do you do? You layoff employees...I had to close lunch and lay off another four people.”

At the beginning of the year, Cohen had 18 people working for him. Now, it’s 10.

Minimum wage will reach $15 for all businesses in California by 2022.