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National Federation of Independent Business


Minimum Wage High Would Cost 400,000 Jobs

by Policy Brief
 

FOR IMMEDIATE RELEASE Contact: Suzanne Collins Stoltenberg
Communications Director
Phone: (717) 232-8582
Mobile: (717) 779-4721
suzanne.stoltenberg@nfib.org

Hundreds of Thousands of PA Jobs Lost if $15 Minimum Wage Bill Becomes Law
Research finds biggest impact is on small-business workers

HARRISBURG (Sept. 12, 2017) " The National Federation of Independent Business (NFIB) released research on the impact of a $15 minimum wage in Pennsylvania showing it would result in hundreds of thousands of lost jobs over a ten-year period. HB 1520, sponsored by Rep. Patti Kim (D-Dauphin), may be intended to help low wage workers, but this analysis and other studies show such a bill will acutally hurt the people it is intended to help.

“This bill raises the cost of entry-level labor a staggering 107-percent, and some smaller employers simply can’t afford it,” said Rebecca Oyler, NFIB legislative director. “If customers won’t pay higher prices for the goods and services these businesses have to offer, the employer will have no choice but to cut jobs or cut hours. If they can, they may even replace entry-level employees with automation.”

The study on the impact of HB 1520 found as many as 403,000 Pennsylvania jobs would be lost by 2026, depending on the rate of inflation. Most of those losses were in retail, hotel and food service. Real economic output would decline by as much as $48-billion in the same period. NFIB’s Research Foundation used Regional Economic Models, Inc. (REMI) for its analysis. REMI, which projects the impact of policies based on regional and economic data, is also used by the federal and state government and universities.

NFIB detailed the findings in a memorandum to the members of the Pennsylvania General Assembly last week.

“Lawmakers need to consider these unintended consequences of a higher minimum wage,” said Oyler. “They must focus instead on growing Pennsylvania’s economy, not putting us further behind.”

Recently Seattle and the University of Washington conducted a study on the impact of that city’s $15 minimum wage bill. The study was done after the second of three increases when the wage went to $13-per hour. Five-thousand low-wage jobs were lost, and for those still working, hours were reduced by 3.5 million hours. Low-wage workers lost 125 dollars per month in pay. A study by the Pennsylvania’s Independent Fiscal Office two years ago found even a $10.10 minimum wage would result in 31,000 lost jobs in our state.


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