Businesses Warn $15 Minimum Wage Means Higher Prices, Lost Jobs

Four business people standing on piles of moneyNew Survey Highlights Real Consequences of Wage Policies; One-Third Would Raise Prices; 3 Percent Would Shut Down 

Express Employment Professionals released new survey results revealing how businesses would react to a minimum wage increase to $15 per hour.

In a survey of 1,030 businesses, respondents were asked, “What action(s) would you take if minimum wage increased to $15 an hour.” They were asked to select all responses that applied.

Forty-three percent reported that they would have to increase the lower wages in their companies to comply with the minimum wage increase.

Thirty-four percent warned that the $15 minimum wage would lead to increased prices, while 32 percent said they would eliminate positions.

Fourteen percent said they would increase wages for their more highly paid employees, while 3 percent said they would close their businesses and 1 percent said they would relocate.

Similar responses were given in surveys Express conducted in the previous two quarters, though the number of respondents saying they would increase prices or eliminate positions is down from late 2016. The number of businesses that would increase lower wages is up.

In an Express white paper released in late 2016, “Great Intentions. Bad Results. The Problem with a $15 Minimum Wage in America” lays out the challenges businesses face with this mandate, what the unemployed have to say, and what the government should consider before mandating this increase.

Full results are below.

“The $15 minimum wage has sparked contentious political debates across the country,” said Bob Funk, CEO of Express, and a former chairman of the Federal Reserve Bank of Kansas City. “As cities and states consider whether to implement it, they should be mindful of the consequences. Good intentions do not always lead to good results.

“After all, a higher wage for some can mean no wage for others. And, workers may end up having to spend the extra cash from higher wages on higher priced goods and services. It’s a delicate balancing act.”

What action(s) would you take if the minimum wage increased to $15 an hour? (Please check all that apply.) Q2 2017  Q1 2017   Q4 2016
Increase lower wages in your company 43% 40% 38%
Increase the price of goods or services 34% 34% 40%
Eliminate positions 32% 33% 36%
Increase higher wages in your company 14% 13% 15%
Close the business 3% 2% 1%
Relocate your business 1% 2% 2%
Other 28% 25% 27%

 

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