Hillary Clinton, Donald Trump, and numerous state officials want to raise the minimum wage. How could all this affect small business?
Even though Donald Trump and Hillary Clinton have been conspicuously mum about their minimum wage plans during the debates, small business owners have plenty of reason for concern.
“Both candidates for president have expressed support for raising the minimum wage, and it’s important for voters to understand the consequences,” said NFIB President and CEO Juanita Duggan.
Federal minimum wage increases could be devastating for small business owners, according to a new report released by NFIB. The report assumes an increase in the federal minimum wage to $12 per hour phased in by 2019, then increased every year afterward based on a cost of living measurement.
The result: Raising the federal minimum wage to $12 per hour could cost the private sector 1.8 million jobs over 10 years and cut economic output by $2 trillion. Fifty-seven percent of those job losses would come from small businesses.
Five states are also set to vote on wage increases this November. State- and citywide effects from minimum wage increases, which, in some places have gone well beyond the $7.25 national minimum, have already produced troubling numbers so far. The Los Angeles Times reported that after California announced its gradual shift to a $15 per hour wage by 2022, American Apparel said it might outsource the making of some garments to another U.S. manufacturer—and wiped out 500 local jobs. Likewise, Seattle restaurants have had to raise prices, add service fees, or do away with tipping in order to adapt, according to the Seattle Times.
Through most of her campaign, Clinton has supported the $12 per hour federal minimum wage, but recently she has conceded she would be willing to sign a bill supporting a $15 per hour minimum wage, with certain stipulations.
Donald Trump’s stance on minimum wage is much more difficult to pin down, as he has shifted opinions on the subject several times. In July, Trump seemed to support a raise to $10 per hour while emphasizing that it should be a state decision.
*Note: This news coverage does not equate to an endorsement of any candidate by NFIB.
Photo credit: Gage Skidmore