NFIB/CA Releases Study on Impact of Senate Bill 935 (Minimum Wage Increase)

Author: Michelle Orrock Date: June 11, 2014

The National Federation of Independent Business/California – the Voice of Small Business – today released a study on the impact of Senate Bill 935, which would increase California’s minimum wage to $13.00 per hour in the next three years and pave the way for future increases in the minimum wage depending on future inflation. This increase comes less than a year since Governor Brown signed Assembly Bill 10 in September 2013, which raised the minimum wage to $10 an hour – a 25 percent increase on employers.

The study, conducted by NFIB’s Research Foundation in Washington D.C., found that the long-term effect of SB 935 would be the loss of jobs and economic productivity in the state. Depending on the future rate of inflation, the passage of SB 935 could result in more than 323,000 jobs being lost in California over a ten-year period and a reduction in real output of $224 billion. 

“Small business owners are still devastated by the fallout of the cost increases from Assembly Bill 10, which catapulted California’s minimum wage to the highest in the nation, and legislature now wants to raise it again in less than a year?” said John Kabateck, NFIB/CA Executive Director. “Add our state’s claim for the highest statewide sales and income taxes in the nation, and it’s obvious that Sacramento politicians have one primary objective this election year: eviscerate the private sector and give public employee unions the king’s ransom, regardless of small business job loss.”

“The news that more than 57 percent of the more than 300,000 lost jobs would be from small businesses is a terrifying prospect,” continued Kabateck. “Our small business members continue to be pessimistic about the economy and job creation. The passage of legislation like SB 935 would be the nail in their coffin to any plans they might have to hire and grow their businesses and kick California’s economy down a deeper hole, if that is even possible.

“Our legislators should be supporting policy that encourages job growth by reducing regulations and taxes, and providing incentives for small businesses to create jobs, not laws that will turn Main Street into a ghost town. SB 935 sends exactly the wrong message at the wrong time.”

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