Problems of Raise the Wage Act

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National Federation of Independent Business,

NFIB, the nation’s leading small business advocacy organization, issued the following statement on behalf of NFIB President & CEO Juanita D. Duggan in response to the United States House of Representatives passage of the Raise the Wage Act, harmful legislation that would mandate a federal minimum wage increase to $15 per hour by 2025 with automatic increases every year thereafter:

“The House dealt a devastating blow to small businesses today, risking record growth, job creation, and already increasing wages. In states and municipalities across the country, a mandated minimum wage hike has consistently led to lost jobs, production, and income, and it must not be replicated on the federal level. NFIB members from dozens of states were on Capitol Hill this week sharing their concerns over this costly legislation, and we urge members of the United States Senate to heed their call and prevent this bill from moving forward.”

The Raise the Wage Act would lead to massive job losses, lost production, and income reduction on a national scale:

– The NFIB Research Center released a study earlier this year that found:
-$2 trillion reduction in real economic output
-6 million jobs lost
-900,000 jobs lost at businesses with fewer than 500 employees, 57% of private sector job losses; 700,000 jobs lost at businesses with fewer than 100 employees, 43% of private sector job losses
-615,000 able-bodied individuals who would no longer be in the workforce

The nonpartisan Congressional Budget Office released its report last week, titled the “Effects on Employment and Family Income of Increasing the Federal Minimum Wage,” which estimates that the Raise the Wage Act would result in a median estimate of 1.3 million lost jobs and $9 billion in total income lost in 2025.