Small Business Group Works Against Minimum Wage Hike

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Breanna Deutsch Contributor
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Small business advocates are speaking out against a proposed minimum wage increase ahead of a scheduled Senate vote.

On Tuesday, the National Federation for Independent Business sent the United States Senate a letter outlining why Iowa Democratic Sen. Tom Harkin’s bill, the Fair Minimum Wage Act, which would hike the mandated federal hourly minimum from $7.25 an hour to $10.10, would adversely impact America’s small business owners.

“Yet again, lawmakers are targeting the nation’s economic engine – small business owners – with an anti-employer agenda,” said NFIB manager of legislative affairs Ashley Fingarson in a statement.

She added, “With increases to health care costs, higher taxes, more costly regulations, and now a dramatic minimum wage increase, small business owners simply can’t afford another excessive government mandate.”

In part, the NFIB based their statements off of a recent report conducted by the nonpartisan Congressional Budget Office, which found that at least 500,000 jobs would be eliminated from the labor force if the bill became a law.

A later CBO finding estimated that the additional payroll obligations would cost business $15 billion more in salaries.

“This proposal to dramatically increase the federal minimum wage comes on the heels of rising health-care costs, higher taxes, increased regulations – they are just piling it on the small businesses,” Fingarson told The Daily Caller News Foundation.

While some larger corporations, including the retail store GAP, have received praise for announcing plans to bump their hourly wages above $10, NFIB argued in the letter to senators that wage hikes put a heavier burden on small businesses than large ones.

“Big corporations do not have to absorb the cost of minimum wage increases because most minimum-wage jobs are offered by small businesses,” read the note.

The authors explained that small businesses have much slimmer revenue margins than their larger counterparts, “The minimum wage directly affects small businesses because a large amount of their earnings go directly to pay for operating expenses, such as equipment, supplies, lease or mortgage, credit lines, inventory and employee wages and benefits.”

On the other side of the debate, Democrats and labor activists point to the CBO’s prediction that a $10.10 minimum wage would boost earnings for more than 16.5 million people while lifting 900,000 people above the federal poverty level by 2016.

Fingarson says this narrative does not give the full story.

She explained to TheDCNF that any increase to a small business person’s payroll will force them to choose between cutting employee hours, laying off workers, or raising prices for consumers.

NFIB has made this a key vote on which they are scoring legislators.

Senate Majority Leader Harry Reid has scheduled a Senate vote on the legislation for Wednesday; the bill lacks Republican support.

Recognizing the shortage of votes, Democrats have vowed to continue championing the issue until the midterm elections in November.

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