NFIB: Raising Minimum Wage Leads to Job Loss

National Federation of Independent Business • 225 State Street, Suite B • Harrisburg, PA 17101 • 717/232-8582 • Fax: 717/232-4098
CONTACT: Suzanne Stoltenberg 717-232-8582 x1 [email protected]

Warning to state Senate Committee: Entry level jobs will be eliminated
NFIB Testifies On Raising the Minimum Wage in Pennsylvania

HARRISBURG (May 5, 2015) — The National Federation of Independent Business (NFIB), Pennsylvania’s largest small-business group with 15,000 members, testified today before the state Senate Labor and Industry Committee on bills that would raise the minimum wage in Pennsylvania, warning that thousands of entry level jobs will be eliminated if those measures are passed.

"Like most government mandates on business, raising the minimum wage will have a deep and disproportionate impact on the small-business sector because small businesses are the least able to absorb such a dramatic increase in their labor costs," said NFIB/PA State Legislative Director Neal Lesher. "A large amount of small business earnings go directly to pay for operating expenses, such as equipment, supplies, property costs, inventory and employee wages and benefits. Increasing labor costs does not incentivize growth or hiring, but instead creates incentives for employers to find ways to use less labor."

A study released last year by NFIB’s Research Foundation analyzed the potential economic impacts of raising the minimum wage in Pennsylvania and forecasted the loss of as many as 28,000 to 119,000 jobs over a ten year period if the wage is increased to $8.75 or $9.00, as those increases are tied to cost-of-living increase. An increase to $10.10 would result in even higher job losses. The report uses a widely accepted regional economic model that is also used by the federal government, local governments and universities created by REMI, Inc. This research is supported by the findings of the non-partisan Congressional Budget Office (CBO), which found that raising the minimum wage to $10.10 nationally would result in a loss of 500,000 jobs nationally.

"Those most disadvantaged by increasing the minimum wage are teenagers and the unemployed. Increasing the minimum wage prices low skill workers out of the job market, particularly youth, robbing them of the experience of a first job where basic job skills are often learned," said Lesher. "Numerous studies have shown the negative impact that higher wage floors have on teen employment."

According to the most recent report of the Pennsylvania Minimum Wage Advisory Board, 60 percent live in a household with income over $40,000 annually and 31 percent live in a household with income above $75,000 annually. The majority, 53 percent, are under the age of 25 and 30 percent are under the age of 20. The vast majority, 82 percent, has no children and 77 percent work part-time.

During Small Business Week, May 4-8, NFIB/PA will be involved in many activities supporting small business.

Monday May 4, NFIB/PA Webinar on Safe Lifting and Material Handling for Small Business, Prevent workplace injuries:
Tuesday May 5, NFIB/PA presents testimony to the Pennsylvania state Senate Labor and Industry Committee, Pennsylvania Capitol Building:
Wednesday May 6, NFIB/PA meeting with small business owners and Congressman Tom Marino in Williamsport, Pa. at Seewald Laboratories: and
Thursday May 7, NFIB/PA presents testimony on the Pennsylvania business climate from a small business perspective before the state House GOP Policy Committee in Lancaster Pa. at Spooky Nook Sports Complex.

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NFIB is the nation’s leading small business association, with offices in Washington, D.C. and all 50 state capitals. Founded in 1943 as a nonprofit, nonpartisan organization, NFIB gives small and independent business owners a voice in shaping the public policy issues that affect their business. NFIB’s powerful network of grassroots activists sends their views directly to state and federal lawmakers through our unique member-only ballot, thus playing a critical role in supporting America’s free enterprise system. NFIB’s mission is to promote and protect the right of our members to own, operate and grow their businesses. More information is available online at