Increasing wages alone costs employers millions of dollars, forcing them to cut jobs, invest in businesses, and fill open positions. One Dayton employer estimated that this federal rule change would cost him $2.2 million. This is just her impact on one Dayton employer. Imagine the synergy this would have across her 19,000 businesses in the Dayton area.
In what world does it make sense to continue to burden businesses with the cost and administrative burden of heavy government regulation?
The business world is not immune to the effects of rising wages. The proposal comes amid talk of significant Covid-19 wage increases that businesses have incurred over the past 24 months. The average wage increase rate in 2022 will exceed 4%, and the average wage increase rate in 2023 will be 4.3%. The lowest paid workers saw an average increase of 9% between 2019 and 2022.
In 2017, a federal judge rejected an attempt to change the minimum exemption threshold from $23,600 to $47,000. Ultimately, a new standard for his $35,568 was set in 2020. If this rule is enacted, we expect similar legal challenges from the business community and similar actions from the courts. That's just bad policy.
The Dayton area business community is at a tipping point. This constant attack on corporate freedom of management must end. These heavy government regulations could have a devastating effect on the economy, forcing continued increases in inflation, causing interest rates to rise, and ultimately causing businesses to cut staffing levels.
We can still emerge from the post-pandemic economy without significant damage, but all bets are off if these types of burdens are enacted.
Chris Kershner is CEO and President of the Dayton Area Chamber of Commerce.