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Survey shows at least 3 in 10 businesses unable to absorb cost of minimum-wage hike

As more states and municipalities across the nation begin implementing higher base pay rates for unskilled workers, many companies have either started or plan to start replacing these employees with machines.

Specifically in the fast food industry, chains like McDonald’s are already offering self-service kiosks instead of clerks. By all estimates, the practice is only expected to increase as minimum-wage activists continue pushing their agenda.

The unsustainable cost of doing business with artificially high wages being set by the government is not only a problem among the owners of burger joints, though. Express Employment Professionals recently conducted a survey that found 30 percent of businesses polled admitted they would be forced to lay off employees should the minimum wage be raised to $15 per hour.

Even more — 37 percent — said they would be forced to hike the prices of the goods or services currently being offered.

Nearly 400 businesses in the U.S. and Canada took part in the survey, which left Express Employment Professionals CEO Bob Funk with one overarching takeaway.

“While some workers will see a raise,” he acknowledged, “this survey shows that there are clear negative consequences for raising the wage to $15. Policymakers should always keep in mind the unintended consequences of their actions.”

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4 Comments on Survey shows at least 3 in 10 businesses unable to absorb cost of minimum-wage hike

  1. The other side of the story, workers can’t afford rent on anything less than $15.00 to $20.00 an hour (Average rent is $900 to $1500/mo). It has nothing to do with the type of work, it has everything to do with the cost of living. This is a circle that no one is willing to address. Cost of living goes up, then incomes must go up. Everyone complains about people needing government handouts, but no one is willing to place the cost of housing, food, etc. under control. Workers are having to take these jobs just to survive as the $80,000 a year jobs are few and far. It’s more important that the CEO makes another million, but not ok for a worker to earn a livable wage. Where are these workers to live? Using non-human options still doesn’t resolve the housing problem. It will just make it an even greater burden. If you only build homes of $400,000, eventually you will run out of people that can afford those homes. Then you (builder, construction worker, realtor, etc.) will be looking for a minimum wage job yourself to support your family because those jobs are the only ones being created.

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  2. About the time that people put their money in and nothing comes out, or it is old and cold, you’ll see a switch back to real people. We already have vending machines, but is that healthy food? I respect that I must pay more if we do not wish to re-institute slavery. I see the “we’ll replace you with machines” as an empty threat, a scare-tactic. But, if they make a robot that will do house cleaning, (not just bump around the chairs and furniture and then go re-charge in a corner), then let me know!

    And to Carol N: You make a valid point. What you didn’t mention is that those minimum wage workers are subsidized by welfare payments so corporations can enhance their bottom line and pay their share holders more. We need to stop that cold.

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  3. Those big bad corporations and their darn profits! How about a view from a small business owner. Allow me to share the rest of the economic aspects of $15/hr. Don’t forget the company must also pay 7.5% in social security taxes on the $15/hr. How about workers compensation. Yes, that’s and additional tax on the same $15/hr and it’s paid as a percentage of wages…which means that tax increases as well. Let’s not forget the unemployment insurance….hmm…almost forgot that one. Based on a percentage of your payroll…yest another hidden increase for the small business owners. When governments run by pencil pushers who have never had to make a payroll or owned and operated a small business make economic decisions it’s bound to blow up in their faces. Markets always adjust to legislation. This minimum wage movement will spark a boom in automation (already happening anyway) investment. The same people they’re trying to help will be the people most negatively affected.

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  4. John Jamison (frugal Downeaster) // July 3, 2016 at 6:29 am // Reply

    Here in Washington State (which leads the nation in rising housing costs), the minimum wage needs to be $70,000 per year. One of the factors in rising housing costs is the Growth Management Act which has restricted land from development. Nationwide, the cost for new construction (due to permits and regulations) is now $250,000 for starter homes. Meanwhile rents skyrocket. $15 per hour does nothing to help low income workers and only leaves fewer jobs available for the unskilled. Soon you’ll need a college education (with accompanying $50,000 debt) to work at McDonalds.

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