More than half of those cuts would take place at state’s small businesses
RICHMOND Jan. 24, 2020 – NFIB’s Small Business Research Foundation contracted with a respected regional economic modeling firm to determine the impact of two bills increasing the Virginia minimum wage to $15 an hour would have on jobs and the state’s economy. That forecast estimates that over ten years beginning in 2020, each of the proposed minimum wage schedules would reduce Virginia private sector employment by over 130,000 jobs and result in a cumulative loss in real output produced by the state’s private sector of over $87 billion.
“The people who will be hurt, not helped, by a $15 minimum wage are those without skills or experience who are just entering the workforce because many of those entry-level jobs would be eliminated,” said NFIB’s Virginia State Director, Nicole Riley. “Many small businesses simply can’t afford the increased labor costs, and when raising prices isn’t an option, cutting hours and jobs are the only choices they have.”
The report analyzed the economic impacts of implementing Virginia’s House Bill 395 and Senate Bill 7, each of which proposes an increase in the Virginia state minimum wage to $15.00 per hour within the next six years. The report used a dynamic, multi-region structural economic forecasting and policy analysis model from REMI, a firm that serves governments, the private sector, universities and both political parties which predicts the effects of policies before they happen.
“One of the hidden costs of raising the minimum wage to $15 is that a small business owner must not only increase wages for those employees who make below the minimum but for those who make more so they can maintain worker morale and productivity. There are added costs for the employer when percentage-based payroll taxes increase,” added Riley. “The economic forecast shows the impact of these two bills would also hurt the Commonwealth’s economic health, reducing the number of goods and services produced in the state by tens of billions of dollars.”
Last year, research from the Congressional Budget Office also found a federal $15 minimum wage would result in significant job losses.
For more information on NFIB’s research on HB 395 and SB 7 follow this link: https://www.nfib.com/assets/NFIB_VA_HB395_SB7.pdf
