Editorial by NFIB/Colorado State Director Tony Gagliardi
The following editorial was sent to the Colorado media for free use as content for their publications and websites or as background material for any related stories they might be working on.
All is quiet on the minimum-wage front at the moment, but don’t think last year’s passage of Amendment 70 is any long-term cease fire. Advocates for higher rates will kick off the 2018 session of the Colorado General Assembly with a push to let cities and counties set their own minimum-wage rates.
New research put out by the National Federation of Independent Business is worth every Colorado policymaker’s attention. The minimum wage is not the only issue measured by NFIB’s Small Business Poll, Job Openings, an update on the one published 10 years ago. Other interesting findings include:
- One-quarter of small employers have an open position they are trying to fill
- Of those open positions, 56 percent are full-time jobs, 44 percent part-time
- The percentage of small employers citing lack of specific skills as the reason a job-applicant is not qualified remains unchanged between the 2007 and 2017 polls
- The attitude and appearance of job-seekers seem to have improved from poll to poll.
Work history, social skills, legal issues, wage expectations, English/math competencies, and drugs were other reasons for applicant disqualification. Only the last showed a slight increase over the 2007 poll.
How small employers advertise open positions, how they’re compensating employees, how they promote, how they’re dealing with federal immigration requirements are also asked. It is, however, questions on the minimum wage that are most valuable for state legislators, given their direct influence on it.
“Would a minimum wage increase to $15 phased in over the next 3 years have a negative impact, positive impact or no impact on your business?”
- Businesses with 1 to 9 employees—44 percent negative; 6 percent positive; 42 percent no impact; 8 percent don’t know
- 10 to 19 employees—58 percent negative; 4 percent positive; 29 percent no impact; 9 percent don’t know
- 20-249 employees—60 percent negative; 3 percent positive; 19 percent no impact; 18 percent don’t know
- All firms—47 percent negative; 5 percent positive; 39 percent no impact; 9 percent don’t know.
Taking the results from just the 1-to-9-employee group, the poll asked what immediate actions small-business owners take when hit with a minimum-wage increase. (Some would take simultaneous actions, which is why the percentages don’t add up to 100)
- 84 percent would raise prices
- 76 percent would take lower earnings
- 69 percent would not fill an open position
- 67 percent would increase wages
- 62 percent would decrease the number of employees
- 62 percent would reduce employees’ hours
- 57 percent would increase the use of less expensive or part-time workers.
Amendment 70 is not as draconian as the proposed minimum-wage increase in the Job Openings poll. It increases the rate by 90 cents a year until 2020 when it would reach $12 an hour. Still, the coping actions being taken now by small-business owners are the same, mainly higher prices for consumers and loss of job opportunities, especially for teens and young adults.
It is forever worth reminding everyone that the minimum wage is earned by just 2.7 percent of the nation’s workers, according to the U.S. Bureau of Labor Statistics, and most of them tend to be young. “Although workers under age 25 represented only about one-fifth of hourly paid workers, they made up about half of those paid the federal minimum wage or less. Among employed teenagers (ages 16 to 19) paid by the hour, about 10 percent earned the minimum wage or less, compared with about 2 percent of workers age 25 and older.”
In short, the minimum wage is an entry level wage earned mostly by teenagers and young adults. One major effect of increasing the minimum wage is eliminating entry-level jobs. Despite these facts, proponents of ever-increasing rates wrongly argue that they’re needed to lift people out of poverty, even though little to no evidence exists to back it up.
Not content with Amendment 70’s passage, minimum-wage advocates now want the Colorado Legislature to allow local governments the ability to set their own rates, which would create a crazy quilt of minimum-wage rates throughout the state and a commensurate paperwork migraine for every business.
If NFIB’s recent poll reminds us of anything, it’s that costs have consequences.
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