Concord (April
22, 2014) – The National Federation
of Independent Business (NFIB) today will urge members of the Senate Finance
Committee to reject a bill that would increase the cost of hourly labor by 24
percent over two years regardless of whether business conditions improve.
“If everyone agrees that job growth is the number
one economic priority for New Hampshire then why are we debating a bill that
would make it considerably more expensive for small employers to create hourly jobs,”
asked NFIB State Director Bruce Berke. “The New Hampshire economy is heavily
dependent on small business and small business is heavily dependent on hourly
paid workers. This bill jeopardizes both.”
The Committee today is expected to consider a bill
that would raise the state minimum wage from the federal level of $7.25 hour to
$8.25 per hour by next year and to $9 by 2016.
That would amount to a 14 percent increase initially and a 24 percent
increase over the next 18 months.
Moreover, the bill would mandate automatic annual increases after 2016
based on inflation.
“Predicting inflation is almost impossible and
small businesses have no guarantee that their sales will increase along with
inflation,” said Berke. “The only thing
that small business owners would know for sure is that their labor costs will
be out of their control. That’s hardly
the way to boost employer confidence.”
Berke noted that raising the minimum wage will
increase employer costs all the way up the pay scale.
“For small businesses that rely on hourly workers
this is not about the next new employee,” said Berke. “This will inflate wages for all of their
hourly workers and the additional costs will have to be offset by cutbacks
elsewhere.”
Advocates for a higher minimum wage often claim
that the research is on their side. According
to David
Neumark of the University of California, Irvine, however, who has studied
the published research for the last two decades, the evidence points
overwhelmingly to the conclusion that minimum wage hikes increase
unemployment. The nonpartisan
Congressional Budget Office came to a similar conclusion several weeks ago when
it predicted that a federal plan to raise the wage would result in more than
half a million fewer jobs.
“You don’t have to be an economist to understand
the effect of higher prices on demand,” said Berke. “If the cost of hiring workers becomes too
high for employers, there will be fewer jobs.
This is common sense and we’re urging Senators to apply some of that
today when they consider the proposal.”
Learn more about NFIB at www.nfib.com.
