NATO opposes well-intentioned but misguided proposals to broadly increase the nation’s minimum wage, including the Fair Minimum Wage Act of 2013 (S. 460). This bill would (1) drastically increase the federal minimum wage to $10.10 an hour with increases tied to the Consumer Price Index, and (2) raise the cash wage for tipped employees to 70 percent of the federal standard without considering that labor and living costs vary drastically throughout the country. While cinema owners and operators laud efforts to improve the standard of living for all Americans, NATO believes that applying a universal wage increase to economically disparate regions would stifle both the nation’s economic growth and employment prospects for first-time workers.
NATO is the largest movie theater trade organization in the world, representing more than 31,000 movie screens in all 50 states, and additional cinemas in 78 countries worldwide. Our membership includes the largest cinema chains and hundreds of Main Street theater owners. The cinema industry is a leader in employing young first-time job holders, as well as individuals with disabilities and elderly persons seeking to supplement their income—workforce demographics that generally have difficulty finding employment in this current economy.
While our industry recognizes the need for individuals to earn wages that allow them to be self-sufficient, the majority of the nation’s 160,000 cinema employees do not independently support themselves. Those who choose to make a career out of working in cinemas are promoted into management positions where they can earn wages that are more than sufficient to support themselves and a family. Moreover, even minimum wage employees typically receive wage increase within the first year of their employment with a cinema.
Economists and policymakers may argue the impact of a minimum wage increase on the economy and individual employees, but cinema owners know the effects firsthand. Depending on the location, a one-size-fits-all wage hike that does not take into account regional economic and cost-of-living disparities could force a cinema company to implement policies that would negatively impact employees through reduced staffing and benefits. In addition, the regressive burden of a higher minimum wage could negatively impact those it seeks to help–low-income families who are most in need of economic relief –by forcing business to increase the cost of all products to stay afloat. Furthermore, mandated wage hikes have the unintended effect of increasing competition for entry-level jobs, thus making it difficult for low-skilled and young workers to find employment and receive “on-the-job” training. Basically, raising the minimum wage increases the size of the obstacle a jobseeker must cross to justify being hired.
While we understand the appeal of increasing the minimum wage, the obvious fact is that a federal mandated increase would stifle the nation’s economic growth and have negative consequences on businesses, workers and consumers. Instead, state and local policymakers are better positioned to determine which wage initiatives are appropriate for their constituencies.