A new survey reports that if Congress raises the current minimum wage from $7.25 to $10.10, there will be catastrophic effects. Among private employers paying the minimum wage, 38% will fire workers, 54% will reduce the number of employees they hire, and 65% will raise the prices on the goods and services they provide.
The survey, conducted by Express Employment Professionals, also revealed that among employers including those who pay minimum wage and those who pay more, if the minimum wage is raised, 19% would fire workers, 39% would cut their hiring, and 51% would raise their prices.
The Congressional Budget Office said last month that even raising the country’s minimum wage gradually to $10.10 by 2016 would see employment numbers plummet by 500,000 workers by the second half of 2016. Other estimates say that there is a 70% chance that the number of 500,000 could zoom close to one million.
Bob Funk, CEO of Express and the former chairman of the Federal Reserve Bank of Kansas, warned:
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.