The leading advocacy organization for U.S. small businesses is focusing its legislative efforts on defeating a proposal to increase the federal minimum wage to $15 per hour.
After a series of victories on Capitol Hill capped off by the December stimulus package that included $284.5 billion for small businesses, the National Federation of Independent Businesses is lobbying Congress to “do no harm.”
“Minimum wage is the biggest issue,” Jeff Brabant, NFIB’s manager of government relations, told the DCNF.
“If your goal is to shut down independently owned mom-and-pop shops on Main Street and grow the market share of big-box megastores, then I can think of nothing better than passing a federal $15 minimum wage today, because it will devastate small businesses,” Brabant said.
Big business groups have either lined up in favor of an increased minimum wage or have chosen to stay on the sidelines, according to Brabant.
But while many big businesses can afford a $15 minimum wage and have already adopted it, small businesses, which drive job growth in the U.S., would be crushed by such a drastic increase, Brabant said.
“If you’re a small business, a $15 minimum wage is a huge deal,” Brabant said. “You can’t necessarily automate your workforce and you can’t necessarily pass on those costs to the consumer or just eat those costs in your margin, like some bigger businesses can.”
The economic burden of a $15 federal minimum wage would disproportionately fall on small businesses since they don’t have the cash reserves or profit margins to account for the added costs, the NFIB Research Center found in a 2020 study.
One third of small businesses said they would likely resort to laying off employees if Congress raised the minimum wage to $15 per hour, according to a recent CNBC survey.
New York small business owner Gianni Cracchiolo said minimum wage hikes have been a “silent killer” during his testimony before the Senate Banking Committee on Thursday.
Cracchiolo said his family-owned bakery has been crippled by $120,000 in added costs and his customers have turned to big-box retailers after he was forced to raise prices.
Overall, the minimum wage increase would lead kill 1.4 million jobs while taking 900,000 people out of poverty, the Congressional Budget Office estimated in a report released last week.
On Jan. 26, top Democrats including House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer reintroduced the Raise the Wage Act.
The legislation, which would gradually raise the federal minimum wage to $15 over the course of five years, was initially passed by the House in 2019 but never received a vote in the Senate.
In addition, President Joe Biden’s proposed $1.9 trillion coronavirus relief package contains a $15 minimum wage increase.
“On behalf of Main Street businesses across America, we write to strongly oppose the Raise the Wage Act of 2021,” a coalition of groups, including the NFIB, wrote in a Feb. 4 letter to Congress.
“More than doubling the federal minimum wage presents a significant obstacle to ailing small businesses trying to survive the pandemic.”
Apart from its fight against raising the minimum wage to $15, in the past year NFIB has lobbied for Paycheck Protection Program and Economic Injury Disaster loans, according to Brabant.
NFIB also opposed extending large unemployment insurance payments, which it said would incentivize jobless people not to seek work.
In the future, the organization will oppose new small business taxes, new leave mandates and the pro-union Protecting the Right to Organize Act.
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