Some Companies See Problems with Minimum Wage Increase

Document created by 1050210 on Nov 10, 2014
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Published Date: 03/31/2014

 

Reneé Watkins

By Reneé Watkins

 

On February 12, 2014, President Obama signed an order to raise the current minimum wage paid to federal contractors to $10.10 per hour, effective January 1, 2015. Obama is also campaigning in favor of his proposal to raise the federal minimum wage for all workers to $10.10 per hour and putting pressure on Congress to initiate such legislation.

 

Express Employment Professionals (Express) conducted a recent survey of more than 1,200 business owners and HR professionals across the United States to get their thoughts on President Obama’s proposed increase to the current minimum wage for all workers and the impact it could have on their business.

 

The survey results are reported as follows:

 

• 19% of those surveyed currently pay minimum wage for entry level employees

 

Of those who currently pay minimum wage, if the proposed increase goes through:

 

  • 38% surveyed say they would lay off some current employees to cover the cost
  • 54% surveyed say they would reduce hiring due to the increased cost
  • 65% surveyed say they would increase their prices to cover the cost

 

• 81% of those surveyed currently pay above minimum wage for entry level employees

 

Of those who currently pay above minimum wage, if the proposed increase goes through:

 

  • 19% surveyed say they would lay off some current employees to cover the cost
  • 39% surveyed say they would reduce hiring due to the increased cost
  • 51% surveyed say they would increase their prices to cover the cost

 

Bob Funk, former chairman of the Federal Reserve Bank of Kansas City, and current CEO of Express, says, “Based on this survey, there’s no denying that raising the minimum wage will result in layoffs, reduced hiring, and higher prices at a large chunk of American companies.”

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