The National Retail Federation on Tuesday voiced its disapproval of an increase to the federal minimum wage, urging Congress in a written letter to instead focus on “pro-growth initiatives and reforms.”
“Ninety-five percent of retailers in the U.S. are single store operators and they'll have a harder time adding jobs as a hike will put pressure on those folks,” David French, NRF’s senior vice president for government relations, told FOXBusiness.com.
The statement was pointed at Senate legislation that would raise the federal minimum wage from $7.25 per hour to $10.10 by 2016 -- an initiative that the NRF calls an “anti-job tax.” In February, President Barack Obama signed an executive order hiking the minimum wage for new federal contractors to $10.10 an hour and has kept up his push for a raise in the federal minimum wage nationwide.
The group says the mandated hike would increase labor costs for employers, and in turn, decrease the number of job opportunities for teen and entry-level workers.
“We have an economy growing still too slowly and far too many people are still out of work,” French said.
Also on Tuesday, Senate Majority Leader Harry Reid, D-Nev., announced the Senate would push a vote on minimum wage legislation to next week, and instead turn its attention to the Paycheck Fairness Act. A request for comment from Sen. Reid’s office was not immediately returned.
According to a new survey conducted by Oklahoma City-based private staffing company Express Employment Professionals, 38% of employers who currently pay workers minimum wage would cut jobs if faced with a mandated hike, while 54% say they would reduce hiring and 65% say they would raise prices on goods and services.
According to the NRF, one in four U.S. jobs is a retail sector job and the industry is the nation’s largest private sector employer, supporting more than 42 million working Americans. French says a nationwide minimum-wage hike mandate will sting smaller retailers, whom he says will “feel the pinch significantly” as most of their jobs are minimum wage.
In the open letter to the Senate, French called raising “the standard of living” for low-wage workers a “valid goal,” but said there was “clear evidence that mandated wage hikes undermine job prospects.”
The NRF, the world’s largest retail trade association, said the timing for a mandated hike comes at the “least opportune moment,” citing the many challenges small and larger businesses are facing including the integration of the Affordable Care Act into their ventures.
French said Congress was guilty of “sound-bite politics.” He said lawmakers have other tools to fight income inequality, such as increasing the earned income tax credit, improving tax reform and strengthening trade alliances, without compromising job creation.
“Finding more opportunities for those trying to start out is a better economic approach than restricting the amount of jobs for those seeking employment,” French wrote. “What we should be doing is talking about how we improve people’s chances to move up.”
In addition, the NRF vowed to file minimum wage votes in its annual voting scorecard, which functions as a barometer for the retail industry’s policy priorities, as “Key Retail Votes.”
Follow Natalia Angulo on Twitter @natisangulorico.