New Research Estimates 1.8 Million Jobs Erased by $12 Federal Minimum WageTuesday, October 18, 2016
Posted by Reagan Reeve
Columbus, OH (October 18, 2016) – Raising the federal minimum wage to $12 per hour could reduce private sector employment by 1.8 million jobs over 10 years and cut economic output by $2 trillion, according to a new report released today by the National Federation of Independent Business (NFIB).
“Both candidates for president have expressed support for raising the minimum wage, and it’s important for voters to understand the consequences,” said NFIB President and CEO Juanita Duggan. “Raising the minimum wage to $12, without any connection to the economy or business conditions, has the potential to devastate small businesses and wipe out nearly two million jobs.”
Duggan pointed out that neither Donald Trump nor Secretary Clinton has been asked about raising the minimum wage in any of the presidential debates so far. The candidates will meet tomorrow night for their final nationally televised exchange before the election on November 8th.
“This is a very important issue that deserves more serious treatment from all of the candidates running for federal office this year,” she said.
The NFIB report assumes an increase in the federal minimum wage to $12 per hour phased in by 2019, and then increased every year thereafter based on inflation. Secretary Clinton has already called for a $12 minimum wage. Mr. Trump has also publicly said that he would support a federal increase, although he hasn’t been specific on how high the rate should be raised.
According to the Bureau of Labor Statistics, 3.3 percent of all hourly workers currently earn the federal minimum wage of $7.25. Raising the wage to $12 would increase the cost of labor for those workers by 65 percent.
Small businesses would be affected disproportionately. According to the NFIB research, 57 percent of the jobs that would disappear would come from small businesses. Ohio alone would lose an estimated 74,000 jobs by 2026.
“Ohio has fought to make our economic comeback from the past recession. The important legislation that has emerged from the Ohio Legislature in recent years has allowed entrepreneurs to grow and reinvest in their small businesses. This proposed federal jobs killer could slam the brakes on our recovery,” said Roger Geiger, Vice President and Executive Director of NFIB/Ohio.
For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America's economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities. More information is available online at www.NFIB.com/newsroom.