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The divide over the minimum wage seems to be growing deeper, with employees staging strikes across the country in favor of an increase, and U.S. CFOs cautioning against such a move.
In a new Global Business Outlook survey released by Duke University and CFO Magazine, CFOs across the country believe that increasing the minimum wage nationwide to $10 an hour would lead to "substantial job losses among retail, service and manufacturing firms."
In January, President Obama proposed a $9 federal minimum wage during the annual State of the Union Address, up from the current $7.25 level. Any type of increase is likely to have a big impact on the foodservice industry, which employs about 13 million people.
In the Duke/CFO Magazine survey, among firms that indicated whether a wage hike would affect their hiring, nearly half of retail firms (47 percent) and approximately one-third of service and manufacturing companies said they would reduce jobs if the minimum wage rose to $10.
"While a hike in the minimum wage would help low-wage workers who retain their jobs, the unintended negative consequence of job loss would be borne by this same group of workers," said John Graham, a finance professor at Duke's Fuqua School of Business and director of the survey. "There is hope for compromise, however. Some firms in these industries already pay above minimum wage and others indicate that a modest hike in the federal minimum wage would cause only modest job loss."
Only about 10 percent of CFOs in the retail, service and manufacturing industries say they would decrease hiring plans with an $8.50 national minimum wage.
NCCR responds to committee proposal
Meanwhile, in Washington, the National Council of Chain Restaurants responded to statements made this week by the Senate Health, Education, Labor and Pensions Committee on a proposal to raise the federal minimum wage.
"[The] hearing is an exercise in rehearsed political talking points that ignore the practical reality of what yet another government mandate on businesses would mean in this fragile economy," NCCR Executive Director Rob Green said in a press release. "The Congressional Budget Office recently estimated that raising the minimum wage would result in significant job losses for the workers who are most in need of a leg-up in this time of high unemployment.
"Missing at today's hearing are the voices and stories of the millions of Americans who started their working lives with a minimum wage job who are now successful businessmen and -women and used these jobs as the first rung on the ladder to success.
"What we need Congress to focus on are policies that move the economy forward. Job creation should be at the top of that list, not mandates that make it harder for businesses to put Americans to work."
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