A double whammy for small businesses in the state
NFIB sent out the following news release in anticipation of a vote on the minimum wage and expanded paid leave:
TRENTON, Jan. 30, 2019 – NFIB, the leading small business association in New Jersey, anticipates that the state Senate and Assembly will pass bills tomorrow raising the minimum wage to $15 an hour, and greatly expanding the current paid leave law. Gov. Phil Murphy is also expected to sign those measures. The following comments on those pieces of legislation may be attributed to NFIB’s State Director in New Jersey, Laurie Ehlbeck:
On a $15 minimum wage:
“The reality is many small businesses can’t afford to pay workers with no skills $15 per hour because they don’t have the money. There are only so many ways to cover those added labor costs and raising prices may not be one of them if customers won’t pay more. In businesses like food service and hospitality, there is not a lot of profit, and that’s why this will result in reduced hours and disappearing entry-level jobs.
“The unfortunate result of this policy is it will be nearly impossible for anyone to get that first job and necessary experience as entry-level jobs go away. We are already seeing kiosks installed in McDonald’s because the cost of a one-time investment in technology is less expensive than the cost of maintaining an employee at a wage above their worth. Government can’t mandate a wage and change that market-force calculation.”
On expanded paid leave:
“When it comes to small businesses, doubling leave to 12 weeks and allowing it in many more situations will put employers in an untenable situation where they may not be able to get the workload done, especially if two workers are off at the same time. That is a threat to all the employees whose jobs are at risk if no product or service is being sold, and it’s a threat to the existence of the business itself.
“It’s much more complicated in a high-tech world when someone goes on extended leave because employees have position-specific training and others may not be able to step into the job. There is a huge cost in pre-training others in multiple positions, and if several critical employees are off at the same time, it could be disastrous.”
On both measures:
“Passing a $15 minimum wage and expanding paid leave is a painful double-whammy for small New Jersey businesses. It’s piling on additional labor costs and hindering their ability to operate on a daily basis. If you want businesses to become fed up and leave the state, or just give up, this is the way for policymakers to do it.”