Increased Minimum Wage to Cause Layoffs and Higher Prices for Goods

Over the past couple of months, a number of articles have been written about the dangers of raising the minimum wage as high as the Democrats are pushing for.  It seems that the Democrats are planning on using the minimum wage, immigration reform and income inequality as their campaign platforms in this year’s midterm elections.

If a recent report is accurate, I recommend that Republicans also use minimum wage as part of their campaign platforms.  According to the report, if the minimum wage is increased as much as Democrats are proposing, 54% of employers said they would reduce their hiring; 65% said they would have to pass the increase on to consumers by raising their prices.  Worse yet, 38% of the employers surveyed said they would be forced to start laying off workers.

The survey was conducted by Express Employment Professionals, the nation’s largest privately held staffing firm.  They surveyed 1,213 business owners and human resource professionals across the country.  Those surveyed were asked what would be the impact to their business if the minimum wage was increased.  Of the 1,213 companies surveyed, 213 of them currently pay their employees the minimum wage of $7.25 per hour.

Bob Funk, CEO of Express Employment Professionals commented on the survey, saying:

“There’s been a lot of debate and speculation about the impact of a minimum wage increase on job creation.  At Express, we decided to go directly to the employers who make those decisions to find out what a minimum wage increase to $10.10 would mean for them specifically and for the economy in general.”

“As with any such policy change, there are upsides and downsides.  But 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. How severe will those effects be? That remains to be seen, but policymakers will certainly want to be mindful of this reality as they legislate.”

Every Republican and Libertarian running for office or re-election this year needs to use this survey in their campaigns.  They need to tell the public that if Democrats win and get their way and raise the minimum wage, prices for goods will increase, people are going to lose their jobs and it will be harder for them to find new ones because employers are not going to be hiring as many people.  Bottom line is that an increase in the minimum wage to $10.10 an hour will be an economy and employment disaster in an already struggling economy.