New Survey: 38% of Private Employers will Cut Workers if Minimum Wage Hike is Forced on Them

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 poll, designed to gauge businesses’ reaction to the wage increase, marks the latest effort by businesses and groups on both sides of the issue to shape a heated debate about whether increasing pay for workers at the bottom will help or hurt the U.S. economy.

A report from the nonpartisan Congressional Budget Office, released last month, found a jump to $10.10 per hour would cost the U.S. about 500,000 jobs by the second half of 2016. But the study said the increase would also lift 900,000 Americans out of poverty by boosting incomes for the working poor. The CBO study reviewed the work of a range of economists.

The staffing firm’s survey of about 1,200 companies, conducted last month, found that a wage increase would alter hiring plans for a sizable share of all employers including those that don’t have minimum-wage workers. Among all businesses polled, 19% said they would let employees go as a result of the wage increase and 39% said future hiring would be reduced.

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