Recently, Express Employment Professionals released the results of a national survey of employers about the proposed increase in minimum wage. According to the results, if the minimum wage were raised to $10.10 an hour, 38% of employers who currently pay employees minimum wage say that they would have to let some employees go to cover the cost. Among the same group, 54% say they would reduce hiring, and 65% say they would raise prices on their goods and services. Among all employers surveyed, including those who do not currently pay the minimum wage, 19% say they would let employees go; 39% would reduce hiring; and 51% would raise prices.
But, what do employees think?
In order to gain some insight from an employee’s perspective, we polled readers of Movin’ On Up, Express Employment Professionals blog for workers and job seekers, about what they believe would be the impact on the job market if the minimum wage is raised. According to the results, 35% believe there will be fewer full-time jobs and more part-time jobs and 33% say they would expect fewer job opportunities in general. While 16% expect an increase in minimum wage to create better job opportunities. Some respondents selected the “Other” option and provided their own insight into the issue, including:
- More jobs going overseas
- Lower turnover rates
- People in lower wage brackets will have more spending power, thus increasing job creation
While it’s possible to make projections to support both sides of the argument, it’s hard to know exactly how an increase in minimum wage will impact hiring and job creation until – or if – it actually happens. What are your thoughts? What other ways would an increase in minimum wage affect your business? How do you think it would impact our economy? Let us know in the comments section below.
Refresh Leadership is brought to you by Express Employment Professionals.
Regarding the minimum wage increase, what is not being considered is that all wages are tiered. If someone is making $12/hr and the minimum goes to $15, then their expectation will be that their wage will go to $18 to maintain that separation … and on and on up the scale. This will adversely affect the entire job market for all employers and employees.
The biggest winner in all of this are governmental tax agencies as they will get the lion share of the increase.
Also, consider the fact that many union contracts as well as professional employee contracts tie the rate of pay to some multiple of the minimum wage. Thus, a raise of less than $3 an hour to a minimum wage worker will result in a raise of $9 to a union worker whose wage is tied to 3X the minimum wage. This won’t cause inflation and increase unemployment and underemployment, because…magical multiplier!
Every time min wage is increased employee earning potential drops. When I first was earning $12/hr it was a little more than double min wage. Now with min wage having been raised repeatedly there has not been a cost of living raise to equal the increase. After 15+ years in my field and a degree, instead of making double min wage plus some, I only make a few dollars an hour more than min wage. Raising min wage hurts most employees even if jobs are not lost when it raises.
One factor that is not being addressed in the debate over the higher minimum wage is the effect it will have on the Earned Income Tax Credit. Will it be adjusted to recognize the weakened dollar that will result? If there is no adjustment to the EITC, and my suspicion is that there won’t be one, many people will see as much as 1/3 of the wage increase lost due to lower EITC at tax time and many will no longer qualify at all. Thus, the government will have managed to cut its expenditures at the expense of business, ie. consumers, workers and investors.