New England NFIB: POTUS and the Govs make Minimal Sense on Minimum Wage

Date: March 05, 2014

5, 2014)
– The takeaway from today’s campaign-style event in Connecticut,
featuring President Barack Obama, Governor Dannel Malloy (CT), Governor Deval Patrick (MA), Governor Peter Shumlin (VT) and Governor Lincoln Chafee (RI) is that all
of them seem to believe that shrinking small business is somehow the way to
grow the American economy, said the National
Federation of Independent Business (NFIB).


“Connecticut’s economy has lagged the national
economy in terms of job creation and growth, and it’s highly unlikely that
another big increase in labor costs will improve that condition,” said Andrew Markowski, NFIB Connecticut State
.  “The best way for the
President and Governor Malloy to increase wages is to create the conditions
under which workers are in higher demand. 
An arbitrary increase in labor costs will have the opposite effect.   It will inflate labor costs all the way up
the scale and that will result in fewer jobs and higher consumer prices.”


Bill Vernon,
NFIB State Director for Massachusetts and Rhode Island, pointed out that job
growth in both of those states has been painfully slow for more than a decade
and that higher mandatory labor costs won’t help.


“Rhode Island has one of the highest unemployment
rates in the country and Massachusetts has had nearly zero net job growth for a
decade,” he said.  “These governors know
that small businesses can’t absorb higher labor costs without corresponding
growth in sales.  It’s not a realistic
policy.  It’s bound to cause job losses,
especially at the bottom of the pay scale. 
And it’s certain to damage the respective reputations of these states as
places to open and run a business.”


Vermont State Director Shawn Shouldice
said Governor Shumlin’s argument for
raising the minimum wage, published recently on,
makes very little economic sense.


“He’s basically pointing to The Gap and other
major corporations as an example for the rest of the country,” said
Shouldice.  “But 96 percent of Vermont
employers are small businesses
and many of them can’t keep up with The Gap,
or Costco or any of the Governor’s favorite corporations.”


President Obama appeared today at Central
Connecticut State University in New Britain as part of a national campaign to
raise the minimum wage.  He said today
that doing so would improve the economy by giving low-wage workers more money
to spend.


“With all due respect to the President I can’t
think of very many economic predictions that he’s made that have actually
materialized,” said Markowski.  “He made
similar predictions about the stimulus and they fizzled.  He did the same thing on green energy,
banking reform and, most obviously, health care.


“His problem is that he’s arguing against common
sense.  Small business owners can’t wave
a magic wand and increase their sales, reduce their taxes, reduce their health
premiums and reduce their other expenses to make up for a big increase in labor
costs.  In fact, only the federal
government can print and borrow money without limitations.  Small businesses can’t do that.”


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