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Federal Minimum Wage Hike Could Hurt More Workers Than It Helps


Federal Minimum Wage Hike Could Hurt More Workers Than It Helps

(Washington D.C.) – It is being reported thatsome workers’ unions, who have been leading the charge for a minimum wage increase across the nation, recognize the danger it represents to workers and want to be exempt from the laws they’re advocating for. In light of legislation passed in several states and introduced at the federal level, some companies in the restaurant industry have already started to look for cost-saving alternatives to a wage increase they may not be able to afford. Labor costs make up a significant portion of operating expenses for restaurants — for some, salaries represent as much as 30 percent of their fixed expenses. With a reported 11 million people currently employed in the restaurant industry, negative effects on employment in the industry could potentially impact a large number of workers. The exemptions requested by unions are meant to help provide them flexibility in negotiations.

Daniel Garza, Executive Director of The LIBRE Initiative released the following statement:

“Proposals to increase the minimum wage sound simple and appealing, but the reality is much more complex. Unions recognize this. Large companies may be able to absorb the costs of the wage hike but those who hurt the most are small businesses – which account for49.2 percent of private business employment in the U.S. Small businesses will look for means to stay afloat and for many, that unfortunately will translate to cutting work hours or letting go of employees altogether.

A wage increase is something we all hope for, and we want to encourage an economy that creates greater wealth for participants, but federal mandates are not the way to achieve it. To truly foster the economic growth of companies – in order for them to expand, grow, and increase wages – government needs to reduce the costs it imposes on them, and the rules that all too often hamper their growth. When government tries to micromanage – dictating to entrepreneurs how to run their businesses – it makes it harder to grow and to address employee priorities. Lawmakers would be wise to disregard a federal minimum wage increase and instead focus on lifting burdensome regulation that stifle wage increases in the private sector.”

For Interviews with a LIBRE representative, please contact Brian Faughnan, 703-678-4581 or Josh Rivera, 202-763-4428