Though the Congressional Budget Office has already warned that the proposed $10.10 federal minimum wage could cost the economy at least 500,000 jobs over the next two years, President Barack Obama and Democrats are still trying to push the increase through Congress, mostly because they believe it plays to their favor in an election year.
The issue may be an easy way to score political points, but the Wall Street Journal makes note of a new survey which found that most businesses would adjust to an increase in the minimum wage by reducing hiring and increasing prices for goods and services, and some would even lay off workers:
Just over half of U.S. businesses that pay the minimum wage would hire fewer workers if the federal standard is raised to $10.10 per hour, according to a survey by a large staffing firm to be released Wednesday. But the same poll found a majority of those companies would not cut their current workforce.
About two-thirds of employers paying the minimum wage said they would raise prices for goods or services in response to an increase, the survey by Express Employment Professionals found. About 54% of minimum-wage employers would reduce hiring if the federally mandated rate increased by $2.85 per hour. A smaller share—38% — said they would lay off employees if the wage increase favored by President Barack Obama becomes law…
“The response shows that some businesses will certainly lose employees and many will not be hiring as much, if the minimum wage goes up,” Express chief executive Bob Funk said in an interview. “In a time of weak job growth like we’ve had recently, this is not the right time for a wage hike.”
It should come as no surprise that demand falls when the when the cost of labor is artificially increased. That’s why more than 500 economists have argued that the minimum wage is “a poorly targeted anti-poverty measure” and urged lawmakers to address poverty through other policies.
Hey, but it’s an election issue. It’s another hopey changey free thing that President Obama and Democrats want to give away, and they would if not for those obstructionist Republicans. Ignore the fact that the economy is still sputtering along and pay no attention to businesses who are saying that a minimum wage hike would reduce hiring, increase prices and kill some jobs. Just pay attention to the unicorns.