NFIB Study determines that Paid Sick Leave Issue would cost 75,000 Jobs

On August 19, 2008 the National Federation of Independent Business held a press conference at the Statehouse to unveil the results of a study showing that Issue 4 (the mandated paid sick leave issue) would cost Ohio 75,000 jobs while placing a $1.17 billion new cost on Ohio’s employers.  The study also determined that businesses would lose
$9.4 billion in sales from 2008 to 2012 if Issue 4 is passed by Ohio voters on November 4th.

Claudia Kovach, Vice President of City Machine Technology that employs 80 workers in Youngstown stated that “as essential partners to our company’s success, we provide our employees with paid vacation, healthcare, child-birth, bereavement and holiday pay, and shift differential pay, since we work 24/7.  Unfortunately, this mandate will force me to negotiate reductions in benefits with my employees to make up for the added burdens.”

Below is an Executive Summary of the study.

The Executive Summary

1. Under Issue 4,  employers will be taxed about $1.17 billion annually to provide this leave
2. Ohio companies will lose an estimated 75,000 jobs within five years if Issue 4 passes - about 0.3 percent annually
3. Ohio small firms (under 100 employees) will lose an estimated 30,300 jobs (or 41 percent) of the total
4. Ohio’s smallest firm (under 20 employees) will lost an estimated 14,500 jobs (or 20 percent) of the total
5. Although exempt, firms with less than 25 employees experience significant job and financial losses
6. Major job losses will occur in labor intensive sectors such as food services, eating and drinking places, and general retail trade
7. All Ohio firms will lose $9.4 billion in sales from 2008 - 2012; all Ohio small firms (under 500 employees) will lose about 47 percent of the total
8. Small firms under 100 employees lose about 31 percent of future sales
9. Sales loss rates vary by firm size. For example, firms with 20 - 99 employees lose about $1.5 billion in sales from 2008 - 2012, or about $73,000 per firm
10. Estimating the amount of additional labor costs (by firm size and industry) for use of overtime/temporary workers, while important, are beyond the scope of this research and not included in the cost projections
11. Adjusting for overtime/temporary worker costs substantially increases job losses and lost sales

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