Higher min wage serious concern for smaller players - Survey
27 Jul '07
2 min read
Just days after the federal government implemented the first of three increases to the federal minimum wage the U.S. Chamber of Commerce unveiled the results of a survey that show how small business owners from across the country are reacting to the increase. The survey found that nearly 60% of small business owners will not be able to off-set the cost of the wage increase.
"Mandating that small companies pay minimum wage workers at a rate higher than what these companies can afford, is bad business. This survey confirms that the raise drives up costs for everyone and that fewer jobs for low wage earners will be created," said Marc Freedman, the Chamber's director of labor policy.
"Even this modest increase will hurt free enterprise, and the increases which will go into effect in 2008 and 2009 are likely to have an even greater negative impact."
The survey focused on the growth potential, staffing issues, and general profitability of the U.S. Chamber of Commerce small business membership. Small businesses typically have the hardest time absorbing increases in the minimum wage. Nearly 70% of the businesses canvassed responded that they might have to raise their prices in order to cover the increase in the minimum wage.
Over 20% will not be growing their staff as planned, prior to the minimum wage increase. Nearly 34% of these companies have experienced other, non-wage related cost increases as a result of the revised minimum wage.
The U.S. Chamber of Commerce is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.
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