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Advocacy group speaks out against minimum wage hike bill

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(The Center Square) — 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% 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,” Christopher Carlozzi, NFIB State Director in Massachusetts, said in a 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.”

Senate Bill 1200, sponsored by Sen. Jason M. Lewis, D-Middlesex, and House Bill 1925, sponsored by Rep. Tram T. Nguyen, D-Essex, and Rep. Daniel Mc Donahue, D-Worcester, are the focus of a new study that the NFIB commissioned takes a deep dive into the economic impact of both bills.

According to the “Economic Impacts of a Proposed Minimum Wage Increase in Massachusetts” study, the bills would place the minimum wage at $16.25 on Jan. 1, 2024, and then jump to $17.50 on Jan. 1, 2025. The current minimum wage is $15 for non-tipped employees.

Both bills were filed on Jan. 20 and were referred to the Joint Committee on Labor and Workforce Development.

According to a release, the study showed that if the bills become law, there will be a negative impact resulting in potentially as many as 23,000 jobs as the minimum wage would gradually increase under the bills. That would account for 0.5% of the state’s workforce.

Additionally, the study showed that more than 13,000, or 57%, of jobs that could be lost would come from the small business sector. That would negatively impact $3.4 billion, 0.25% of the state’s economic base. Small businesses account for roughly $1.8 billion, or 52%, of the state’s economic output.

According to the study, many of Massachusetts’ 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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