Disproportionate Impact to Iowa Small Businesses
DES MOINES (October 18, 2016) – Raising the federal minimum wage to $12 per hour could reduce private sector employment by 1.8 million jobs over 10 years and cut economic output by $2 trillion, according to a new report released today by the National Federation of Independent Business (NFIB). Small businesses, especially those in Iowa, would no doubt be disproportionately impacted by such an increase.
“Raising the minimum wage to $12 would be disastrous for Iowa small businesses, especially those that rely on hourly or entry-level positions,” according to NFIB Iowa state director, Kristin Failor. “The unfortunate reality that everyone must begin to understand is that a labor cost increase of that magnitude will not put more money in workers pockets, it will leave them on the unemployment line.”
The NFIB report assumes an increase in the federal minimum wage to $12 per hour phased in by 2019, and then increased every year thereafter based on inflation.
“When small business owners are forced to pay an hourly amount that is unsustainable, they eliminate jobs. It’s really just that simple. The government may be able to dictate wages, but they cannot legislate hiring people,” continued Failor. “This issue has not gotten nearly enough attention this election cycle. It’s time for voters to truly understand the consequences of such a staggering labor cost increase.”
