With the new year around the corner a total of 25 states that includes 83 jurisdictions and 57 cities are all preparing and planning a minimum wage increase. As a result of increasing the minimum wage we see how it helps many workers and employees and along with that we see how it hurts small businesses. A report released and noted by the nonpartisan Congressional Budget Office (CBO) shares that increasing the minimum wage will eliminate 2.7 million jobs. Another result of increased minimum wage is increased cost of goods and services. “Higher wages would increase the cost to employers of producing goods and services,” shares the CBO. “Employers would pass some of those increased costs on to consumers in the form of higher prices, and those higher prices, in turn, would lead consumers to purchase fewer goods and services.”
In another study done they have found that an increased minimum wage would mostly affect ages 16-24. Particularly those in the entertainment, recreation, and food services. CNBC shares that 54% of small businesses oppose the minimum wage raise to 15$ an hour. Another 20% of small businesses share that they will be forced to lay off workers if the minimum wage was raised. Others share their options are very limited to eliminating positions, cutting employee hours, reducing benefits, automating or outsourcing jobs, or closing down.”
Ringing in the new year with minimum wage hikes. Information Station. (2021, December 15). Retrieved February 1, 2022, from https://informationstation.org/kitchen_table_econ/ringing-in-the-new-year-with-minimum-wage-hikes/
It makes sense that as minimum wage rises, small businesses have to increases their prices in order to make enough money to be able to pay their workers while also maintaining a profit. While minimum wage rising seems like a good thing, any benefit from the extra wages is counteracted by rising prices.
ReplyDelete