SB 543 will result in cuts to jobs and employee hours
ANNAPOLIS (March 8, 2018) – On behalf of thousands of small businesses in Maryland, the National Federation of Independent Business (NFIB) opposed SB 543 today, which raises the state minimum wage to $15 per hour by 2023. The financial impact of this legislation will harm not only many small businesses in the state but also employees of those companies whose jobs could be eliminated.
“The cost of this wage mandate is so steep, especially for many small companies that hire entry-level and low-skilled workers, it’s simply unaffordable,” said Mike O’Halloran, NFIB MD. “There is a tipping point when labor costs rise too high in comparison to a company’s profit margin. The owner may not be able to cover those costs by raising prices for goods or services because consumers won’t pay. That’s when an employer is forced to cut jobs and employee hours.”
Under the bill, small business owners will have to pay more than just the cost of higher wages for those making less than the minimum. To prevent a drop in morale and productivity, they may have no choice but to increase wages for those in a range above the minimum. There is also the added cost of higher payroll taxes when wages rise.
“This bill will have unintended consequences and hurt the workers its meant to help,” added O’Halloran. “The economics don’t add up, and as a result, small businesses, jobs, and the state’s economy will take a big hit if it passes.”
NFIB’s Research Foundation conducted a study of companion legislation, SB 543, using widely accepted regional economic modeling. That report found, if passed, there would be a loss of 99,000 private sector jobs over a decade and a reduction of $61 billion in real output. Most of those losses would fall on the small business sector. That study can be viewed at the following web address: https://www.nfib.com/assets/BSIM_MD_MINWAGE_SB543.pdf