WASHINGTON, D.C. (Feb. 5, 2021) – NFIB joined a strong coalition of business groups opposing the Raise the Wage Act of 2021, legislation that would more than double the minimum wage at a time when Main Street can least afford it. The proposed legislation would increase the federal minimum wage to $15 per hour over five years, allow for annual automatic increases without the consent of Congress, and eventually eliminate the tipped wage.
“The COVID-19 pandemic continues to impact small business operations and more than doubling the federal minimum wage now is bad policy,” said Jeff Brabant, NFIB Manager of Federal Government Relations. “Unlike big businesses, small businesses simply can’t afford a doubling of the minimum wage at a time when they are struggling to survive the pandemic. We urge Congress to avoid plaguing Main Street with another costly federal regulation and allow for a successful small business recovery.”
The letter states, “When small employers are confronted with increased labor costs, they are left with few options, all undesirable. They can increase the price of their product or service or reduce spending. Often, this means that employers reduce their total labor force, keep open positions unfilled, and reduce employees’ hours.”
According to a new NFIB survey, 74% of small employers report that this proposal would negatively impact their business. Of those who would be negatively impacted, 89% report they would experience lower earnings, and 87% report that they would increase prices.
NFIB previously opposed the Raise the Wage Act of 2019. The non-partisan Congressional Budget Office confirms that the previous version of this legislation will damage the small business economy, estimating that 1.3 million workers will become jobless and total real income will be reduced by $9 billion by 2025.
