NFIB, Tennessee’s leading small business advocacy organization, has joined a coalition of business groups opposing legislation to initiate a state minimum wage. In a letter to state legislators, the business groups call for workforce training, which would help improve workers’ skillsets and lead to higher wages.
February 17, 2020
Dear Members of the Tennessee General Assembly,
On behalf of our organizations, we ask that you oppose various efforts to establish a minimum or living wage in Tennessee. While well intended, these bills invariably tend to harm the people they’re supposed to help.
Since the establishment of a federal minimum wage, Tennessee employers have complied with and prefer a standard federal approach, instead of a litany of state and local standards. In addition, market demands underscore that wage growth continues to be driven by enhanced job skills; we commend the ongoing efforts of our elected leaders to afford Tennesseans education opportunities that enhance their skills and wages.
We offer the following information for your consideration:
- It is important to emphasize that without a state mandate or an increase to the federal mandate that starting wages across Tennessee have moved to $10 and above in most communities and in our industries, according to feedback from our members and labor experts. In short, a strong economy and a very tight labor market are driving wages up. According to Paychex, Tennessee wages grew nearly 16% faster than wages across the U.S. this past year. Wages in Tennessee grew 3.35%, third best in the nation according to Paychex’s most recent Small Business Employment Index survey, while our cost of living remains relatively low.
- Increasing the minimum wage disproportionately hurts the young, the poor and
- Many minimum wage earners are teenage, part-time, and/or entry-level workers. 45% of the 2.6 million hourly workers (less than 2% of all wage and salary workers) who were at or below the federal minimum in 2015 were ages 16 to 24. An additional 23.3% are ages 25 to 34, according to the Bureau of Labor Statistics.
- Some statistics, as presented, that show high or higher numbers of minimum wage workers do not consider that they are earning tips that put them above or well above the minimum wage.
- According to the Washington Policy Center (2013), the average family income of a minimum wage earner is $53,000 per year and two-thirds of minimum wage earners receive a raise within a year.
- Significant minimum wage increases, like in Seattle, would lead to increased labor costs and tough choices. Businesses would have to increase the cost of their product or service – which in many cases is not feasible – or reduce labor costs elsewhere. The reduction in labor costs would be achieved through reduced jobs, reduced hours, or reduced benefits.
- Having a Tennessee minimum wage that differs from that of our neighboring states could give businesses and employers a reason to locate their businesses outside of Tennessee. While an adjustment to the federal minimum wage is a worthy debate, we believe that’s where the debate should be, as starting wages continue to rise in Tennessee.
Thank you for your support of our state’s job creators and entry-level workforce.
Associated Builders & Contractors, Greater Tennessee Chapter
Home Builders Association of Tennessee
Tennessee Chamber of Commerce & Industry
Tennessee Fuel & Convenience Store Association
Tennessee Grocers & Convenience Store Association
Tennessee Retail Association
Encl. links: U.S. Bureau of Labor Statistics Report (2018)
NFIB Report on Raise the Wage Act (2019)