A new survey reports that the potential minimum wage hike could close 3 percent of small businesses. Another 30 percent of small businesses said that they would curb hiring./p>
National executive search firm The Lucas Group asked 400 small- and mid-sized businesses how a minimum wage hike may affect their daily operations. Many of the respondents said that they would be forced to fire employees, increase prices or freeze hiring practices altogether.
Small businesses in the consumer services filed were more likely to voice their concerns about the proposed $10.10 minimum wage. They were also more likely to raise prices or reduce workforces than businesses in other sectors.
The federal mandate would come on the heels of change nationwide. On Jan. 1, 13 states across the nation raised their government’s minimum wage by various amounts. California is set to follow suit in July by increasing its rate by $1 an hour.
The results of the Lucas Group poll were similar to those in a majority of studies regarding a potential wage increase. A recent Wall Street Journal survey of 1,200 businesses found that approximately 40 percent of respondents were planning to decrease hiring if a wage hike were instituted.
Wages are just one portion of a small business’ complex budget process, with regional factors, technological innovation, competitive pricing and health care costs also working themselves into the blend. An increase in the minimum wage nationwide may have a number of consequences on small businesses in a variety of industry sectors.
The Lucas study found that rising costs due to health care reform are also a major concern for today’s business owners. The wage hike could complicate matters in certain regions: Cost of living has often played a role in the development of wage policies. For example: The standard $7.25 minimum wage carries a lot more weight in rural Alabama than in Los Angeles.