Chamber Opposes Minimum Wage Proposal

WASHINGTON, D.C. – The United States Chamber of Commerce criticized a proposal by Sen. John Kerry, (D-Mass.), that could result in a massive 36 percent hike in the minimum wage and threaten the job prospects of entry-level workers.

"While the political appeal of this proposal is obvious, the fact remains businesses and workers will be losers under this proposal," said Randel K. Johnson, Chamber vice president for labor, immigration and employee benefits. "The majority of economists agree that raising the minimum wage kills job creation. Placing this burden on small businesses will stifle our economic growth."

Johnson pointed to a study by the Employment Policies Institute, Job Loss in a Booming Economy, 2nd Edition, that suggests that the 1996 minimum wage increase of only 50 cents per hour destroyed approximately 645,000 entry-level jobs.

Johnson also noted that Kerry's proposal is similar to a minimum wage measure expected to be introduced in the Senate, which the Chamber will oppose.

"Small businesses cannot simply wave a magic wand to create more revenue when lawmakers pass these types of bills," Johnson said. "It is these businesses, the backbone of our economy, which will be hurt the most by this proposal. Some politicians may view initiatives such as these as a painless way to appeal to voters. But in reality, there is no such thing as a free lunch."

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

# # #

04-88