The Greater Newport Chamber of Commerce Executive Director, Erin Donovan-Boyle, and Board Chair, Joseph Pratt today issued the following statement regarding the proposed minimum wage increase.


We write to share our concerns during a covid pandemic of the legislation to raise the minimum wage, specifically the increase proposed to take effect this year (October 2021). 

Members of the business community understand and appreciate the desire to improve wages in the state.  We share the goal of ensuring Rhode Islanders have the employment opportunities and earning capacity to support themselves and their families.  However, the State’s business community continues to experience the significant economic strains of the 2020 pandemic, and these challenges are expected to continue for the foreseeable future.  Adding the proposed increases in the minimum wage to the continued state-mandated capacity restrictions currently in place will only compound the barriers to getting the economy going again, adding significant costs to reestablishing and growing Rhode Island’s small businesses.

In addition, these and other related costs associated with the proposed increase in the minimum wage are increases that cannot be passed onto a dwindling customer base under the current circumstances.  Unfortunately, while businesses have tried to be creative and remain agile in this new world, the current pandemic situation is imposing significant strains on businesses, forcing many to make very difficult decisions about staffing and benefits for those that remain.

We understand the desire to raise wages and compensation.  In fact, we have testified on past minimum wage bills that we support wage growth that coincides with cost of living increases and the consumer price index.  However, the arbitrary numbers being proposed are not tied to any impact data.  While final impact numbers of businesses closed and jobs permanently lost due to COVID will not be known for some time, estimates indicate that statewide 1,700 businesses will close that employ 28,000 people.  Additionally, unemployment in the Greater Newport region was at 7.5% in December 2020—5,158 workers—compared to the 2019 rate of less than 3%.  Increasing minimum wage will undoubtedly increase the cost of doing business which will further compound the problem and we will see a further increase in unemployment and a decrease in labor force participation.

 We know that the hardest hit businesses during this pandemic are struggling to keep their doors open.  An estimated 25% of Main Street businesses will not survive this economic downturn.  Nonetheless, business owners are investing in equipment to implement new safety measures to keep their employees and customers safe; they are coming up with new strategies to appeal to their customer base so that they can bridge through this pandemic; and they are obsessively mulling over their finances to determine when they can bring their employees back to work.  They are not giving up.  Rather than adding additional costs at this most difficult moment in time to the business community, work with them; support them; help them recover…so that when our economy comes back stronger than ever, they are in a position to offer competitive salaries that will offer workers gainful employment and secure positions in healthy businesses that are not on the brink of failure.

We urge you to consider holding off on any minimum wage increase for the hardest hit industries until we get through the pandemic and are in a true recovery.  The US Senate recently took a similar position acknowledging the pandemic as a difficult time to raise wages and the threat that action will have on the labor force. Thank you for your time and consideration and for all you do for our community.

Sincerely,

Erin Donovan Boyle                                                   Joseph P Pratt

Executive Director                                                      Chair, Board of Directors

Greater Newport Chamber of Commerce                  Greater Newport Chamber of Commerce

ABOUT THE GREATER NEWPORT CHAMBER OF COMMERCE

The Greater Newport Chamber of Commerce is one of the state’s largest business advocacy organizations, whose mission is to connect, innovate, enhance and advocate for the businesses of Greater Newport. As a trusted and reliable institution for nearly 100 years, the Greater Newport Chamber is a vibrant collective body of the greater Newport business community with nearly 1,100 members representing over 50,000 employees. We work to create valuable strategic partnerships, promote strong economic growth, diversity and prosperity to serve its members and the Greater Newport region.

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