Minimum Wage Hike Could Drive Price Increases

March 8, 2007 ( - Forty-seven percent of human resources professionals are opposed to the proposed minimum wage increase to $7.25, while 31% sanctioned the federally-mandated pay hike, according to a survey by the research division of Deploy Solutions.

According to a press release , the survey of more than 1,000 respondents found that 62% of respondents would increase their prices if the proposal passed to compensate for the additional wage costs and 42% said they would decrease labor hours.

Twenty-seven percent said that they would absorb the costs and about 18% said they would change their mix of part-time and full-time employees.

Nearly half (45%) of respondents said a minimum wage increase would force them to raise all wages, while 13% believe they could absorb the increase. Sixteen percent said that the minimum wage in their state was already higher than the proposed rate.

Humetrics Inc., a research division of Deploy Solutions, conducted the survey. “Our survey findings reveal many hidden ramifications,” said Mel Kleiman, president of Humetrics, in the news release. “For instance, how will this higher wage impact inflation? How will it affect jobs at the higher hourly levels, or at the professional level? It appears that raising the minimum wage will push other salaries higher – companies will have to pay more for everyone they hire, not just the starting hourly staff. We may be underestimating the ripple effect.”

The survey gathered opinions from over 1,000 HR and operations professionals, primarily in the retail, transportation, restaurant and health-care industries.