Washington state could lose more than $7 billion in economic output and 16,000 jobs should House Bill 1355 become law, according to testimony given today by Patrick Connor, Washington state director for the National Federation of Independent Business, America’s largest and leading small-business association.
Connor presented the findings from a report conducted exclusively on HB 1355 by NFIB’s Research Foundation to the Senate Commerce & Labor Committee at this afternoon’s hearing on the measure. “Common sense alone should warn what would happen if you shocked employers with a nearly 30-percent spike in the state’s minimum-wage rate,” said Connor, “but our study, which uses the most sophisticated economic modeling available, puts in graphic detail the economic peril contained in HB 1355.”
Michael Chow, senior data analyst for NFIB’s Research Foundation, used the Business Size Insight Module to produce the report on HB 1355. BSIM is a dynamic, multi-region model based on the Regional Economic Models, Inc. structural economic forecasting and policy analysis model, which integrates input-output, computable general equilibrium, econometric, and economic geography methodologies. The BSIM has the unique ability to forecast the economic impact of public policy and proposed legislation on different categories of U.S. businesses differentiated by employee-size-of-firm.
HB 1355 would raise the state’s hourly minimum-wage rate to $12 from its current $9.47, already the highest of any state in the nation (the District of Columbia’s rate is $9.50). The federal minimum-wage rate is $7.25. HB 1355 squeaked out of the House on a 51-to-46 vote on March 3. Today’s hearing in the Senate was its first in that chamber.
“It will forever bear repeating that the minimum-wage rate is an entry-level wage earn almost entirely by teens and young adults starting out on their working lives,” said Connor. “Raising it has mainly one effect, and that is to remove the first rung up the economic ladder for tens of thousands of young people. This state also has a disingenuous history with this issue, after voters were promised that a 1998 ballot initiative linking future increases in the minimum-wage rate to rises in the Consumer Price Index would forever solve the issue and remove it from politics.”
The entire 19-page BSIM analysis can be read here.
For more than 70 years, the National Federation of Independent Business has been the Voice of Small Business, taking the message from Main Street to the halls of Congress and all 50 state legislatures. NFIB annually surveys its members on state and federal issues vital to their survival as America’s economic engine and biggest creator of jobs. NFIB’s educational mission is to remind policymakers that small businesses are not smaller versions of bigger businesses; they have very different challenges and priorities.