A survey by Express Employment Professionals of employers who pay their workers minimum wage, released on Wednesday, found that more than half would cut back on hiring if the federal minimum wage is raised to $10.10 an hour.
According to a report from the Wall Street Journal, the survey found that two-thirds of these employers would raise prices as a result of an increased minimum wage, while 54 percent said they would reduce hiring. Thirty-eight percent said they would lay off employees.
The Obama administration and Congressional Democrats recently began pushing for increasing the federal minimum wage to $10.10 an hour.
Last month, the Congressional Budget Office released a report that stated that raising the minimum wage to $10.10 would lift 900,000 Americans out of poverty, but it would cost 500,000 jobs.
Raising the minimum wage is a popular idea among Americans, but many economists believe it does more harm than good.
One of the main critiques among economic experts who disagree with raising the wage is that it causes businesses to have less money to invest in younger, less skilled employees.
“It is estimated that less than 15% of the total increase in wages resulting from an increase in the minimum will go to people below the poverty line and less than a third of those receiving the minimum wage are families below the poverty line. Most minimum wage workers are from above median income families. So, most of the people benefiting from the minimum wage are not the intended targets of the 'anti-poverty' aspect of raising the minimum wage,” writes William Dunkelberg for Forbes.
“As a jobs program,” Dunkelberg continues, “raising the minimum wage is a real loser. Congress raised the minimum wage 10.6% in July, 2009 (know of anyone else getting a raise then?). In the ensuring 6 months, nearly 600,000 teen jobs disappeared, even with nearly 4% growth in the economy, this compared to a loss of 250,000 jobs in the first half of the year as GDP growth declined by 4%. Why? When you raise the price of anything, people take less of it, including labor. The unemployment rate for teens remains unacceptably high. Workers of all ages that are relatively unskilled are adversely impacted by this policy.”
Other experts agree.
“Research from economists David Neumark, Mark Schweitzer and William Wascher found a higher minimum wage results in a net increase in the proportion of families who are poor or near-poverty -- meaning that the 'losers' from a minimum wage increase outnumber the 'winners,'” writes Michael Saltsman, a research fellow at the Employment Policies Institute, for CNN.
Many economists, however, have expressed support for an increase in the minimum wage.