NFIB Massachusetts Says Minimum Wage Compromise will still Cause Job Losses

Date: March 13, 2014

Boston (March 13, 2014) – A plan to increase the state minimum wage more than 30 percent in the next three years is better than an alternative proposal but still too much for some small businesses, said the National Federation of Independent Business (NFIB) today.


“It’s a good faith effort to soften the impact of raising labor costs on small businesses but in the end it will add to the cost of running a small business and force small businesses into making difficult hiring decisions,” said NFIB State Director Bill Vernon.


Vernon reacted to news that Speaker Robert De Leo is backing an increase over three years to $10.50 per hour.  The increase would be combined with some reforms to the state Unemployment Insurance system intended to reduce costs for employers.


“It’s a fair attempt on the Speaker’s part to accommodate small business but the Unemployment Insurance reforms don’t address the underlying problems with the system and for that reason they can't really offset the substantial increase in labor costs imposed by a much higher minimum wage.”


Vernon pointed to a recent study by the nonpartisan Congressional Budget Office that predicted more than half a million job losses nationally as the result of a federal bill that would raise the minimum wage to $10.10 per hour.


“All of the versions that are under consideration on Beacon Hill are more aggressive than the federal plan,” said Vernon.  “That means that the job losses would be at least as severe in Massachusetts and job creation will be slower here.


“Small businesses that can’t count on a big increase in sales to accommodate higher labor costs will find a way to reduce employment,” he continued.  “They’ll eliminate positions, lay off workers, cut their hours and look for ways to automate jobs so they don’t need employees. That is the way the economy works.”


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