The campaign led by President Barack Obama to raise the minimum wage is not getting much support from CFOs, as many claim it would hurt their businesses more than help them.

minimumWAGEAccording to results from the September Duke University/CFO Business Outlook Survey, top financial executives contend that an increase in the minimum wage, if high enough, would lead to layoffs and hiring freezes.

The current minimum wage is $7.25, although it’s higher in some states.

Though many CFOs said they wouldn’t have an issue if the minimum hourly wage increased to $8.75, anything near $10 or over would give them serious concern. In fact, nearly half (46%) of those surveyed at companies affected by the minimum wage said they would lay off employees if the minimum wage increased to $15 an hour.

Also, 35% of respondents from the affected companies said employment growth at their firms would be limited if the wage was $8.75. That percentage nearly doubles when the minimum wage is set at $15.

Further, almost 20% of the participants from the affected companies admitted that they would “reduce employee benefits or increase product prices if the minimum wage were increased to $8.75” while a little more than 40% would do the same if the minimum wage was $15.

And although about a quarter felt that an hourly wage at $10 would help them hire “higher quality” workers and lower attrition, more than a third expressed a similar viewpoint if the wage were $15.

Source: Nashville Business Journal CFOs say minimum-wage boost would result in ‘immediate layoffs

Photo: Flickr user The All-Nite Images, CC BY-SA 2.0

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One response to “Minimum Wage Hike Poses Economic Harm, Say CFOs”

  1. This article suggests an emphasis on the affect of a minimum wage increase on the finance department of major companies. Have you considered the large effect that this potential increase of minimum wage would have on supply chain departments and the budget of COO’s? Considering that the operations, purchasing and supply chain sectors of companies are concerned almost wholly with cost reduction, this issue would be a major game changer for many supply chain heavy companies. Like stated above, even when companies have to increase their prices to compensate for the wage increase, buyers at companies throughout the US will be affected by this increase in prices by their suppliers. Procurement specialists will lose negotiation leverage with many of their suppliers as costs for companies who are heavily factory or manufacturing based, will suffer from having hundreds of minimum waged workers cost more to them. I leave this comment to continue the conversation on increasing wages in the US, and to recognize that many departments within affected companies, will be feeling the brunt of this possible legislation.

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