Many HR Professionals Against Raising Minimum Wage, Will Reduce Labor Hours and Raise Prices

Employers are committed to attracting and retaining quality employees, but new Humetrics survey finds that many HR professionals also see challenges with minimum wage hikes

When polled about the proposed Federal minimum wage increase to $7.25 per hour, many human resources professionals are against the idea, according to a new survey by Humetrics, Inc., a research division of Deploy Solutions. The survey gathered opinions from over 1,000 HR and Operations professionals, primarily in the retail, transportation, restaurant, and healthcare industries. Questions covered participantsí current starting pay for hourly employees, what influences current wages, and how they would respond to a Federally mandated increase.

ìOur survey findings reveal many hidden ramifications,î observed Mel Kleiman, President of Humetrics. ìFor 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 ñ companies will have to pay more for everyone they hire, not just the starting hourly staff. We may be underestimating the ripple effect.î

When asked if they were for or against raising the hourly wage, 47 percent said they were against it, while 31 percent approved. Additionally, 16 percent said that the minimum wage in their state was already higher than the proposed rate.

The reality of raising hourly pay surfaced when participants indicated how they would absorb an increase in costs. Over 62 percent said they would raise prices, while 42 percent stated they would reduce labor hours, and only 27 percent resolved that they would take the hit on their bottom line. About 18 percent said they would change their mix of part-time and full-time employees to compensate for the increased costs.

Respondents also foresee a ìripple effectî in pay structures resulting from a raise in hourly pay. Over 45 percent believe that they will be forced to raise wages across the board, while only 13 percent believe they could absorb the increase.

When asked how they determined starting wages for hourly employees, 53 percent of survey respondents marked the field ìwhatever it takes to be competitive in the marketplace,î while 43 percent selected ìwhat the job is worth.î Just 4 percent said they were ìwilling to live with lots of turnover.î

Humetrics, Inc. is a research division of Deploy Solutions, a leading provider of recruiting and talent management solutions. For additional information, call Mel Kleiman at Humetrics at 800-218-0930.