One small business advocacy group is speaking out about a minimum wage bill currently weaving through the Massachusetts Legislature.
The National Federation of Independent Businesses is concerned that a bill that would create a 33 percent hike in the state’s minimum wage would adversely affect small businesses operating across the state. The hike, the group says, could lead to job losses, income reductions, and closures in the small business community.
“Predictably, the negative impact of these one-size-fits-all, extreme wage hike bills would fall disproportionately on small employers, who will not have the cash reserves or profit margins to plan for and absorb the aggressive increase in labor costs that larger corporate and chain employers do,” said Christopher Carlozzi, Massachusetts state director of the National Federation of Independent Businesses, said in a written statement. “Massachusetts’ Main Street businesses face an ever-increasing number of challenges following the pandemic and state-mandated restrictions and lockdowns.
“Inflation, labor shortages, supply chain disruptions, high fuel prices, spiking utility rates, and crushing UI taxes imposed by state government are dragging down Main Streets across Massachusetts. Small business owners simply cannot afford Beacon Hill politicians saddling them with such drastic labor cost increases.”
Massachusetts Senate Bill 1200, sponsored by state Senator Jason Lewis (D-Winchester), and Massachusetts House Bill 1925, sponsored by state Representative Tram Nguyen (D-Andover) and state Representative Daniel Donahue (D-Worcester), are the focus of a new study that the National Federation of Independent Businesses commissioned to examine the economic impact of both bills.
The bills would increase the state’s minimum wage to $16.25 an hour on January 1, 2024, and then to $17.50 an hour on January 1, 2025. The current minimum wage is $15 an hour for non-tipped employees.
Both bills were filed on January 20 and were referred to the state legislature’s Joint Committee on Labor and Workforce Development. They have not yet gotten a public hearing.
According to a press release, the study found that if the bills become law, as many as 23,000 jobs would be lost as the minimum wage gradually increases. That would account for 0.5 percent of the state’s workforce.
The study, titled “Economic Impacts of a Proposed Minimum Wage Increase in Massachusetts,” found that more than 13,000, or 57 percent, of jobs that could be lost would come from the small business sector. The study found that by 2033 the minimum wage increase would result in a “negative economic output impact” of $3.4 billion, 0.25 percent of the state’s economic base. Small businesses account for roughly $1.8 billion, or 52 percent, of the state’s economic output.
According to the study, many of Massachusetts’s small businesses won’t be able to handle the payroll taxes that come with higher wages. The organization said state lawmakers should provide tax relief to small businesses instead of burdening them with “higher costs and mandates.”
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