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Survey shows how minimal wage increase would affect U.S. businesses

Over the past months fast-food employees in the U.S. have been protesting against low payment, demanding minimal wage to be increased. However, the proposed minimal wage of $15 per hour, double that now, has been rejected in some states as being too high. President Obama has been pushing employers to raise the minimal wage to at least $10.10 per hour, raising the dispute further.

The survey covers 1,213 business owners and HR professionals across the U.S.

The survey covers 1,213 business owners and HR professionals across the U.S.

A survey conducted by the largest U.S. private staffing firm, Express Employment Professionals, shows what employers think the impact of raising minimal wage to $10.10 would have on their businesses.

The survey covers 1,213 business owners and HR professionals across the U.S. Some 230 of the surveyed reported paying employees the current minimal wage.

“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,” according to Bob Funk, CEO of Express. “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.”

Full 38% of the respondents that pay minimal wage said they cannot afford a wage hike and would have to let go some employees if minimal wage increases to $10.10 an hour, as President Obama suggested. Among the same group, 54% of them said they would reduce future hiring as a result of the changes. Meanwhile, 65% of employees who pay minimal wage responded they would raise prices for goods and services, involving end-users in the issue.

Some 230 of the surveyed reported paying employees the current minimal wage.

Some 230 of the surveyed reported paying employees the current minimal wage.

Among all business owners and HR specialists interviewed, 19% say they would need to let employees go and 81% they would not have to do so. Meanwhile, the number of interviewees who responded positively to the question whether they would reduce future hiring if the minimum wage was increased was 61% of all respondents. The remaining 39% did not believe the wage increase would affect future hiring.

A little over half of all survey respondents, or 51%, reported they would have to raise prices for goods and services. They are concerned that other employees who are currently paid a little over the minimal wage would also like an increase since they previously made more than the minimal.

The survey shows the proposed wage increase and the costs are a concern even to employers that do not pay the minimal wage. Moreover, the changes would have an effect not only to employers and employees, but will also affect end-users.

Express Employment Professionals, the company that conducted the survey, provides full-time and temporary staffing and job placement. 

The survey is part of Express Employment Professionals America Employed campaign which aims to explore the state of employment in the U.S. and explores the profile of those hired and the reasons for hiring them.