Concord (December 11, 2013) – The state’s leading small business group today urged US Senators Jeanne Shaheen and Kelly Ayotte to oppose legislation that would raise the cost of entry-level labor by nearly 40 percent by 2015 and then every year automatically based on inflation.
“Small business owners in New Hampshire can’t snap their fingers and increase their sales by 37 percent,” said NFIB State Director Bruce Berke. “They can’t reduce their taxes by 37 percent. They can’t reduce their mortgage or their insurance or the cost of their supplies. Our economy is heavily dependent on local and family-owned businesses and this would devastate them.”
Senate Majority Leader Harry Reid (D-NV) is expected to move legislation this week that would increase the federal minimum wage from $7.25 per hour to $9.15 next year (26 percent), $10.10 within two years (37 percent) and then every year thereafter based on the Consumer Price Index (CPI). An increase that size and which never ends would fall hardest on entry-level workers but also on the customers on which New Hampshire small businesses rely.
“Most small business owners already pay more than the minimum wage,” said Berke. “Increasing the minimum wage will only create upward pressure on wages, costs of materials and supplies that businesses need to operate. Even worse, this bill would increase the minimum wage every year, automatically, forever based on inflation, which is very hard for small businesses to predict.
“Many small businesses can’t afford to pay more every year and they will respond by raising prices, terminating workers, cutting their hours or finding ways to automate so they don’t have to create jobs for people who need them,” he continued.
According to the federal Bureau of Labor Statistics, only 1.5 percent of all hourly workers in New Hampshire currently earn the minimum wage. They’re typically teenagers and young adults working part time or just breaking into the workforce. Most are not, as proponents suggest, struggling to raise families on minimum wage and those who are won’t be helped if their jobs disappear.
“Minimum wage jobs have a value far beyond the hourly wage,” said Berke. “That’s where teenagers and young people can break into the labor force, gain experience and learn the skills and habits that enable them to move up the ladder. Raising the minimum sharply and then every year forever will price them out of the market.”
Businesses in the restaurant and hospitality industries, which are central to New Hampshire’s economy, rely heavily on tipped workers whose wages would quickly spiral upward, said Berke.
“Without tipped workers the restaurants, taverns, recreation businesses and tourist destinations would severely handicapped,” he said. “This law would inflate their wages every year, putting many family-owned and small businesses in jeopardy.”
A permanently increasing federal minimum wage would come on the heals of the controversial Affordable Care Act that has already roiled the labor and insurance markets for New Hampshire small businesses.
“Washington has caused enough damage to the economy without another heavy-handed mandate on small employers,” said Berke. “The economy remains weak, consumers are not confident and small businesses are are already reluctant to make long-term financial commitments. This would push some over the edge.”
He urged Senators Shaheen and Ayotte to oppose the bill (S-1737), which may be voted on as early as next week in the US Senate.
“Jeanne Shaheen and Kelly Ayotte know this state,” said Berke. “They know that most of the people earning minimum wage are kids working part time or people working to earn extra money in restaurants, hotels, ski resorts and other small businesses. They also know that small business is the backbone of our economy, which is why we strongly encourage them to vote against the measure.”
For more information about NFIB, please visit www.nfib.com.
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