One-size-fits-all Minimum Wage Mandate Will Destroy Jobs, Businesses, and Livelihoods

As Ranking Member of the House Small Business Subcommittee on Oversight, Investigations, and Regulations, I delivered the following opening statement during yesterday’s hearing on Democrats’ proposal to raise the federal minimum wage to $15 per hour.

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Remarks as prepared
 
Thank you, Mr. Chairman. Before I begin, I would like to thank Ranking Member Luetkemeyer and my colleagues on the Subcommittee for the opportunity to serve as Ranking Member of the Subcommittee on Oversight, Investigations, and Regulations. I look forward to working with each and every one of you in this capacity.  

Small businesses shuttered. American families struggling to pay their rent. Livelihoods destroyed. These are the devastating consequences we have witnessed as a result of this pandemic and, along with it, forced lockdowns all across the country.
 
Fortunately, in my state of Texas, we were quick to open back up, giving millions of small business owners the opportunity to keep their doors open and fight to protect the businesses they have invested their lives savings in. 
 
But what we are here to discuss today – a federal, nationwide mandate to raise the minimum wage to $15 per hour, will put us right back to where we were months ago. American jobs destroyed, small businesses forced to close their doors, and life savings gone to waste. I can’t think of anything more devastating in a time when our small businesses are barely getting back on their feet. 

Earlier this month, the non-partisan Congressional Budget Office (or CBO) estimated that increasing the minimum wage to $15 per hour would lead to the loss of 1.4 million jobs by 2025. Of those 1.4 million American workers displaced, CBO estimated that 700,000 – half of those workers – would fall out of the labor force entirely.  

Make no mistake: This top-down, one-size-fits-all mandate will impact our small businesses the most. These mom-and-pop shops already operate on thin margins: the local Main Street restaurants, hardware stores, hair salons, and florists. The heartbeat of our communities. They simply cannot afford to absorb mandated increases of any kind. 
 
Not to mention, a wage mandate takes away any variation and discretion that an entrepreneur has to scale his or her business to the area in which it operates, whether in my home state of Texas or the Chairman’s home state of Minnesota. Why should a waitress at a busy restaurant in the heart of New York City – where the average rent for a 1-bedroom apartment is $2,475 per month – be making the exact same as a waitress in Billings, Montana – where the average rent for a 1-bedroom apartment is $678 per month? The federal government does not – and cannot – know what is best for each town across America. 
 
What I can’t seem to wrap my head around is the American workers who will be impacted the most by this reckless policy. My colleagues who support this proposal claim this will help our lower to middle class, our single moms. As a single mother myself, who was a waitress back in the day, I sit here wondering what these single moms will do when the local restaurant or hair salon they work at is forced to close their doors because they simply can’t afford to pay their employees $15 per hour? Or when businesses have to choose between shutting down or replacing their workers with automation?
 
How will these single moms pay their rent? How will working families feed their children?
 
As one of my colleagues across the aisle said over the weekend, “we don’t want” those businesses. That’s his message to our mom-and-pop shops struggling to keep their doors open right now: If you can’t afford to pay $15 per hour, we don’t want you.
 
Let that sink in for a moment.

After being selected to serve on this Committee, I was eager to sit down with local business owners across North Texas to hear firsthand what is working, what isn’t working, and where they need government to get out of the way. They were all crystal clear: increasing the minimum wage will have a disastrous impact on their business. In fact, many were confident they would have to close their doors immediately. And what does that mean for American workers? From young workers to single moms, our working families will be hit hardest by this policy. 

Mr. Chairman, don’t just take my word for it. Over the last week, our Committee has received testimony from small business owners all across the country, explaining how this federal mandate would decimate their businesses and their livelihoods along with it.

I would like to ask for unanimous consent to enter these statements into the Congressional Record. Thank you.

I would also like to take a moment to share testimony we received from Ian MacLean, President and Owner of Highland Landscaping in my district of Southlake, Texas, and the Chair of the U.S. Chamber of Commerce’s Small Business Council. Here is what he had to say about how legislation that would increase the federal minimum wage from $7.25 per hour to $15 per hour would affect his business.

“Before we started hearing about this Congress’ plans to raise the federal minimum wage, we had already begun exploring solutions to growing wages in our industry such as Husqvarna robotic mowing systems and purchasing more machinery to do more of the labor work on the construction side. In order to mitigate the effects of a minimum wage hike, we would fast-track those solutions and eliminate most of our entry-level and less-skilled labor positions. Unfortunately, this would eliminate our ability to provide youth jobs, entry level jobs, and summer jobs. As a small business owner, I take great pride in creating and sustaining jobs for people who can then provide for their families. I believe most small business owners do as well. During the pandemic, I was able to create three new jobs. With news of a potential wage hike, I’m now making preparations to move in the opposite direction. 'Small Business' is the biggest job creator in the United States, and the driving force of our economy. A wage hike to $15 per hour would cause small business owners like me to not only stop creating new jobs, but to eliminate jobs.”

Mr. Chairman, I truly believe each and every one of us – from our colleagues, to our witnesses, to our small business owners, like Ian McLean – want the same thing. We want to see our small businesses make it out of this pandemic. We want to see working families lifted up. And we want to advance policies that will give every American a shot at living their American Dream. 

I look forward to finding ways to work across the aisle to accomplish these goals, but a one-size-fits-all minimum wage mandate is not the answer.

I thank all of the witnesses for joining us today and I yield back.