House to Vote on Minimum WageJuly 11, 2019
Earlier this year, House Democrats led by Rep. Bobby Scott (D-Va.) introduced a bill to gradually raise the federal minimum wage to $15.00 per hour from the current $7.25 by 2024. The House is expected to vote on the Raise the Wage Act, (H.R. 582) as early as next week. While it is expected to pass the House, the Republican-controlled Senate will likely not consider it.
Specifically, the bill would hike the minimum wage to $15 per hour by 2024 through annual increases. It would also end provisions that in some cases allow employers to pay workers under age 20 and employees with disabilities less than the wage floor. NSBA believes a $15 per hour U.S. wage will burden small-business owners, force cuts to workers’ hours and hamper companies in areas where living expenses are relatively low.
Though the bill may not become law as long as Republicans control the Senate and White House, many Democrats view it as a campaign tool for the 2020 elections. Every major Democratic candidate for president has endorsed a $15 per hour minimum wage. More than 200 Democrats—including many who face competitive reelection bids next year—have endorsed the bill.
Raising the pay floor to $15 per hour by 2025 would boost wages for 17 million workers, the nonpartisan Congressional Budget Office estimated. At the same time, the CBO projects that in an average week in 2025, 1.3 million otherwise-employed workers would be jobless if the federal minimum wage went up to $15. That’s a median estimate. Overall, CBO economists wrote that resulting job losses would likely range between “about zero and 3.7 million.”
Thus, lawmakers’ well-intended efforts to increase the federal minimum wage will likely cause a hardship for many small firms, particularly those in highly competitive industries, and could lead to reduced work-hours, lay-offs and stalled small-business growth. To offset higher employee wages, small businesses may need to raise their prices on the goods and services they sell. This can lead to decreased sales, decreased revenues and lower profits. With less money to spend, small-business owners may have to decrease or eliminate capital improvements, marketing, new hires, bonuses, debt service and production.
Meanwhile, twenty-nine states, the District of Columbia, the Virgin Islands and Guam have higher minimum wages than the federal level of $7.25. Seven states are on track to increase their wage minimums to $15 in coming years.
House leadership are scheduling H.R. 582 for a House floor vote next week which would force small businesses around the country to implement a crippling mandated wage increase. NSBA urges caution in promulgating any kind of federal mandate on small businesses. NSBA asserts that an increase in the federal minimum wage could have a significant, negative impact on small businesses and for those seeking entry-level employment and on the U.S. economy. For these reasons, NSBA urges you to contact your lawmakers and ask them to oppose the Raise the Wage Act, H.R. 582.