Texas Small Businesses Would Be Hard-Hit By Federal Minimum Wage Increase

Date: March 18, 2014

Texas has more minimum wage employees than any other state

While there are currently no serious efforts at the state or municipal level to raise the minimum wage in Texas, an increase in the federal minimum wage would have a major impact on the state, as it has the most workers making the minimum wage of any state in the nation. President Obama and his allies in Congress have made passing a minimum wage increase a key plank in their mid-term election platform and are campaigning heavily on the idea.

Texas has more than 400,000 employees working for minimum wage, about 13 percent of all those making the minimum nationwide, and many thousands more working for less than the Democrats’ proposed new minimum of $10.10 an hour. Media reports also say that seven of the Dallas area's 13 counties have at least 6,000 workers employed for less than $11 an hour, many of whom would be impacted by a federal increase.

What It Means for Small Businesses in Texas:

An increase in the federal minimum wage would have a significant downside for Texas small businesses, more than any other state. The increase would also disproportionately impact small businesses, as they don’t have the kind of flexibility enjoyed by their larger brethren to absorb the higher employee costs. NFIB opposes an increase in the federal minimum wage, arguing that raising it to $10.10 would cost hundreds of thousands of jobs, a view backed up by the Congressional Budget Office, which estimates that it would cost the nation 500,000 jobs.

Further Reading:

Texas Public Radio runs a significant piece on the impact of a federal increase on the state, as does KTVT-TV and the Dallas Morning News. Another Dallas Morning News article examines the impact of an increase on state unemployment.

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