U.S. House Votes Against Small Businesses by Passing Raise the Wage Act Legislation

Date: February 27, 2021

Legislation would more than double the federal minimum wage

WASHINGTON, D.C. (Feb. 27, 2021) – The National Federation of Independent Business (NFIB), the nation’s leading small business advocacy organization, issued the following statement from Vice President of Federal Government Relations Kevin Kuhlman in response to the United States House of Representatives’ passage of H. R. 1319, the American Rescue Plan Act of 2021, which is an NFIB Key Vote for the 117th Congress. The legislation included the Raise the Wage Act of 2021, which immediately increases the federal minimum wage by more than 30%.

“Small businesses are working diligently to stabilize their business operations after nearly a year of the pandemic and government-mandated business restrictions. The economic recovery is fragile and uneven, more than doubling the minimum wage would be the final straw for many small businesses across the nation. NFIB strongly opposes the inclusion of the Raise the Wage Act in this legislation. Now is not the time to saddle small businesses with another costly mandate at a time when they can least afford it.”

NFIB sent a Key Vote letter to members of the U.S. House of Representatives. NFIB recently joined a coalition to oppose the Raise the Wage Act of 2021. The legislation would dramatically increase the federal minimum wage to $15 per hour in four years, automatically increase the federal minimum wage threshold every subsequent year, and eliminate the federal minimum tipped wage.

According to NFIB’s latest research, nearly three-quarters (74%) of small business owners reported that increasing the federal minimum wage to $15 per hour would negatively impact their business. Of those impacted, 58% report that they would reduce the number of employees, 60% would reduce employees’ hours, and 67% would leave open positions unfilled.

The non-partisan Congressional Budget Office (CBO) confirms that the previous version of this legislation will damage the small business economy, estimating that 1.4 million workers will become jobless and total real income will be reduced by $9 billion by 2025.

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