Employment expert says wage increases could be problematic
Over 20 states are going to implement an increase in minimum wage in 2017. Estimates say that this means over 4.4 million workers will be looking at a raise, but critics fear it will come at a severe cost for businesses.
Rob Wilson, president of Employco USA and employment trends expert says, “Past numbers show that increasing the minimum wage has a direct and negative impact not only on businesses, but on workers themselves. Research by economists Jeffrey Clemens and Michael Wither of the University of California-San Diego showed that minimum wage increases were responsible for 14 percent of the job losses suffered between 2006 and 2012.”
Furthermore, Wilson says, only 1.8 percent of Americans earn minimum wage.
Wilson explains, “The reality is that most companies endeavor to pay a competitive wage to lure talent and ensure employee loyalty. However, certain positions (such as retail and hospitality) have a very thin margin of profit. These employers can only afford to pay workers minimum wage if they want to stay profitable and remain in businesses. An increase hits their businesses hard, which is why so many people have actually lost their jobs due to the minimum wage increases across the country.”
There is another downside as well.
“Traditionally, minimum wage jobs have been employment opportunities for young adults and those first entering the workforce. When these jobs are reduced, teens and other inexperienced workers suffer as a result.”
However, Wilson says that minimum wage increases could come under attack from Andrew Puzder, President Trump’s pick for Secretary of Labor. “Pudzer is known for being against the minimum wage hike. After we see the impact of these increases across the country, I expect that Pudzer will make steps to change our current course.”
For more on this topic, please contact Rob Wilson at rwilson@thewilsoncompanies.com.