Workplace Issues

Minimum Wage Hike Poses Economic Harm, Say CFOs

Finance execs say raising the federal minimum wage would be a mistake that could cause massive layoffs and job freezes.
Iris DorbianSeptember 24, 2014
Minimum Wage Hike Poses Economic Harm, Say CFOs

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