Note: The following is the February 7, 2016 written testimony provided to the RI House Finance Committee by the Rhode Island Business Coalition, a coalition formed by the Rhode Island Public Expenditure Council (RIPEC). It is filled with scare tactics and poor economics. For context, see any of the “articles in this series” linked at the bottom of this post.
See also the links below provided by economist Douglas Hall who notes that “despite what your favorite Chamber of Commerce lobbyist might have you believe, the sky is not falling.”
Dear Chairman [Marvin] Abney:
The undersigned members of the Rhode Island Business Coalition wish to express our opposition to Article 20 (Relating to Minimum Wages) of the Governor’s FY 2018 budget proposal.
Rhode Island‘s minimum wage rate increased four years in a row, from $7.40 too $7.75 in 2013 to $9.60 in 2017. The increase proposed in the Budget artcile would be the fifth calendar year in a row that Rhode Island businesses have had a wage increase mandated on them. We believe, before any action is taken to adjust the current rate, there should be an analysis of the economic impact and consequences of taking this action. There has been compelling research to indicate that raising the minimum wage will have an economic consequence. Has the Governor’s administration clearly identified the intended results of these increases and have previous changes helped meet those goals?
When measured in terms of employment, the Ocean State’s fastest growing industries are Administrative & Waste Services ( a subsector of Professional Business Service) and Leisure & Hospitality, which grew by 27.9 and 24 .0 percent, respectively, since the height of the recession in August 2009 (RIPEC calculations based on RI DLT [Rhode Island Department of Labor and Training] Establishment Employment Tables for August 2009 and December 2016.) Because these two industries employ a large number of low-wage employees, businesses in these two industries are therefore likely to be hurt by increasing the cost of low-wage labor. In other words, increasing the minimum wage threatens to stifle Rhode Island’s two fastest growing industry sectors. Policymakers should consider how slower (or even negative) growth in these industries might impact Rhode Island’s economy as a whole before adopting a higher minimum wage.
Raising the state minimum wage could also reduce Rhode Island’s competitiveness relative to other states, making it a less attractive place to start, grow, or relocate a business.
- The 2016 CNBC America’s Top States for Business rankings placed Rhode Island 50th, with costs of doing business at 6th most expensive in the nation.
- If the state’s rate is increased to $10.50 as proposed, Rhode Island would be tied with California for the third highest nationally (after Massachusetts and Washington, which are tied for first at $11.00 per hour) The proposal would also make Rhode Island’s minimum wage the second highest in New England, followed by Connecticut ($10.10), Vermont ($10.00), Maine ($9.00) and New Hampshire ($7.25, set to equal the federal rate.)
With these thoughts in mind, we ask that you oppose Article 20.
East Providence Area Chamber of Commerce – Laura A McNamara, Executive Director
National Federation of Independent Business – Bill Vernon, State Director
Newport County Chamber of Commerce – Erin Donovan-Boyle, Executive Director
Rhode Island Hospitality Association – Dale Venturini, President/CEO
Rhode Island Lumber and Building Materials Dealers Association – Ashley E Ranslow, Manager of Government Affairs
Rhode Island Small Business Economic Summit – Grafton Wiley, Tax and Budget Committee Chairman
Rhode Island Society of Certified Public Accountants – Robert A. Mancini, President
Smaller Business Association of New England (SBANE) – Robert Shea, Chairman; Ralph Coppola, Chair SBANE RI Government Affairs Committee