President Obama’s minimum wage speech in Ann Arbor – it’s all about jobs, but not in the way he thinks

By SBAM President and CEO Rob Fowler

In his speech in Ann Arbor on April 2, the President said that “…Nobody who works full-time should be raising their family in poverty.” But his minimum wage policy goes backward from that goal by reducing opportunities for the poor to work.

It doesn’t matter what the minimum wage is if you don’t have a job.

SBAM continues to strongly oppose raising the minimum wage because it kills job opportunities and suppresses economic activity in Michigan’s communities. A minimum wage hike is a tax on employment that takes away job opportunities from workers who are trying to enter the workforce. It has a disproportional impact on small businesses that pay entry-level wages. Minimum wage increases, while perceived to help the working poor, will actually force small-business owners into the difficult choice of reducing hours or making lay-offs. Studies have shown that a five percent increase in the minimum wage leads to a loss of roughly 2.5 percent of all minimum-wage jobs.

Assisting the working poor is a serious issue that needs to be addressed from a tax policy and workforce development perspective, not by an ill-considered minimum wage increase that economically hurts small business owners and suppresses job growth.