November 16, 2018

Some Jewish business owners wary of L.A. minimum wage increase

Yehuda Vojdany moved behind the counter of his shop, Munchies, preparing milkshakes, serving ice cream and making phone calls as a crowd of yarmulke-wearing children and men waited in line.

A native of Kurdistan, Vojdany is an Orthodox Jew and keeps his Pico-Robertson candy shop closed for about 60 days a year to honor Jewish holidays. He runs the store with his wife and her mother, and some days they work extra hours to catch up on sales lost to the Jewish holidays.

But it’s not only his observance of Jewish holidays that is reducing his revenue. Vojdany, 54, and other small business owners in the predominantly Jewish Pico-Robertson and Fairfax areas are expressing concern that Los Angeles’ new minimum wage law will hurt their businesses, which already are operating on slim profit margins.

Starting this month, businesses that employ 26 or more workers are required to pay at least $12 an hour, up from $10.50. Owners who employ fewer are required to pay $10.50, an increase of 50 cents an hour.

“The law puts a lot of pressure on us,” Vojdany said. “I’m concerned because I have a family to take care of.”

Vojdany, who has run Munchies for 17 years, employs two part-time workers. He said he might be forced to cut their hours or let one of them go.   

The new law puts extra pressure on Jewish restaurants that already face financial pressures from requirements that they use only kosher ingredients, which generally cost more than non-kosher products.

Alain Cohen, the owner of Got Kosher? restaurant on Pico Boulevard, said his business is stretched thin by trying to keep down its prices. “It’s a challenge to keep the store open,” he said. “Prices on fish and eggs went up. It’s all going to backfire at customers because our prices will gradually increase.”    

The minimum wage increase prompted Cohen to reduce a number of his employees’ hours and ask them to perform additional duties. He also plans to raise his prices on catering.

For now, he is keeping prices in his restaurant unchanged until next year, when they will increase by $1 or $2 per dish. “We have to adjust little by little,” he said, adding that he would hire fewer employees. “I have to find other solutions.” (Cohen declined to say how many workers the business currently employs.)

Kevin Novin, the owner of Elat Market, also on Pico, said the wage hike will have a big impact on pricing. “We have to gradually raise prices by 10 or 20 percent,” he said. “But because there is a lot of competition in this area, we can’t raise prices right now.”

To save on labor and offset costs, Novin said he plans to cut workers’ hours. “We try to cut overtime hours as much as possible,” he said. “But if we need workers, there is nothing we can do.”

For Houman Yadkarim, the owner of Kabob By Faraj Restaurant and Meat Market, raising prices is not always the best solution. “We are working on small margins,” said Yadkarim, who employs 25 full-time and part-time workers at his establishment on Pico Boulevard. “You increase prices more and more and then wonder, ‘How much are people are willing to pay for food?’ ” 

Many businesses will have no choice but to pass on their expenses to customers, he said, adding that he plans to raise prices by 10 or 15 percent. “All these things are burdening small businesses,” Yadkarim said. “Nobody is benefiting from this. People’s purchasing power is going down.”

Some business owners declined to comment for this story because they fear alienating customers who support the wage increase. And not everyone believes the minimum wage hike is a bad idea.

Shushana Djavaheri, the owner of the gift store Marigold Houseware and Gifts, on Pico, said she finds it hard to understand the lament among business owners over the wage increase. “It’s so expensive to live in L.A. and our employees deserve higher wages,” she said, declining to say how many people she employs. “We are not hiring slaves. Honestly, $15 an hour is not that much.”

Chris Tilly, an economist and professor of urban planning at UCLA, says the minimum wage law won’t trigger any big impact that many business owners are anticipating. Business owners in other states that passed minimum wage increases were nervous, Tilly said, but once the laws went into effect, they found ways to adapt to the increases.

In addition, when people earn more money, they tend to spend more, he said.

Despite any financial impact resulting from the new wage law, Vojdany said he never has considered keeping his store open during Rosh Hashanah or Yom Kippur.

“No money in the world will make me open the store during holidays,” he said. “It’s our religion and we don’t even think about it.”