$ 15 minimum wage means layoffs, one-third of small businesses say

One-third of small business owners say they’ll likely lay off workers if Congress raises federal minimum wage to $ 15 an hour, according to latest CNBC quarterly survey | SurveyMonkey Small Business Survey.

The fight for the federal minimum wage has become one of the most controversial elements of Capitol Hill’s biggest battle over President Biden’s $ 1.9 trillion relief package to Covid.

A Democratic bill – introduced last month and officially known as the Wage Rise Act – was pulled from a Senate bill last week, and President Biden said on Sunday that a wage increase was unlikely. But the House Education and Labor Committee included that provision in an early draft released this week, officially known as the Biden US bailout. Democrats aim to push forward the broader bill by arguing for reconciliation, a process that would not need broad Republican support.

Overall, 54% of Small Businesses Oppose Minimum Wage Increase, According to Q1 2021 CNBC | SurveyMonkey Small Business Survey, which includes responses from 2,111 small business owners across the country and was conducted from January 25 to January 25. 31 using the SurveyMonkey platform.

Twenty percent of small business owners said they would be forced to fire workers if the minimum wage rose to $ 15 / hour, while 13% said they would likely raise some workers’ wages while laying off d ‘other.

The battle for the minimum wage on Main Street is divided by party. Small business owners who identify as Democrats were more than four times more likely than Republicans (89% vs. 20%) to support the minimum wage increase, although the small business demographics were generally conservative.

In part, that’s because more Republicans than Democrats say they’ll be directly affected by an increase in the federal minimum wage: 55% of Republicans but only 38% of Democrats say they will have to raise wages, lay off workers. workers or do it. both in order to comply with the proposed change. But the survey shows that the partisan divide runs deeper.

“There are clearly underlying political differences based on partisanship,” Laura Wronski, head of scientific research at SurveyMonkey, said via email. She noted that Republicans who will need to take action to comply with a $ 15 minimum wage are more likely to say they will lay off workers than raise workers’ wages, while Democrats who will need to take action to comply are more likely to raise wages rather than lay off workers.

Republican small business owners (44%) are much more likely than Democratic small business owners (11%) to say a higher minimum wage would force them to lay off – which includes 28% of Republicans who said they were ‘they should lay off workers and 16% who said they should lay off some workers but raise wages for others.

The higher federal minimum wage enjoys broad support among the general public, according to the response group of non-small business owners surveyed (65% support, while 33% oppose it).

A recent analysis by the non-partisan Congressional Budget Office predicts that increasing the minimum wage could lift an estimated 900,000 Americans who currently straddle the poverty line and affect a total of 27 million Americans earning below or above the poverty line. minimum wage. The CBO’s forecast also projects a federal deficit of $ 54 billion through 2031 and 1.4 million fewer jobs.

For some small business owners, already hit by pandemic closures and the economic downturn, more than doubling the minimum will increase spending, lead to layoffs and potentially business closures. Majority of small business owners, CNBC survey, support President Biden’s $ 1.9 trillion Covid relief plan, at a time when Main Street confidence is dwindling and small business owners fear they will not be able to last another year.

“We certainly enjoy the feeling of lifting people out of poverty, but I think you’ve looked at the unintended consequences that will lead to a lot of people being fired from their jobs,” said Molly Day, vice president of public affairs at the National Small Business Association.

The organization and most of its members have long opposed minimum wage increases, and the proposed bill is particularly difficult for businesses with low profit margins, Day said.

Corporate America, including an influential trade group that represents larger companies such as Walmart, JP Morgan and Apple, said it believes the minimum wage battle is a barrier to the delivery of aid including small businesses. need, and while many of the country’s largest companies support a higher minimum wage and already pay one, now is not the right time to legislate on the issue nationwide.

“Pushing through a minimum wage increase which in the short term can be very damaging for small businesses unless it is designed to take into account regional differences and appropriate exclusions … it will take a lot time to negotiate and this package is not the right place to do it, ”Business Roundtable President and CEO Josh Bolten recently told CNBC.

Some of the country’s top CEOs have brought this case directly to President Biden.

Supporters of the minimum wage increase say it has the potential to improve worker productivity, reduce staff turnover and put more money back into the economy, said Didier Trinh, business manager governments to the Main Street Alliance, a progressive small business group.

Small business owners like Aaron Seyedian have a long history of using MIT’s Living Wage Calculator to factor in the cost of living and set the salary, which differs by region. Seyedian, who employs ten workers at his Washington-area company called Well-Paid Maids, is willing to pay his employees more if that means they can keep the phones on and avoid shift cancellations or calls.

“Even though it only moves a dollar, I think it’s a big difference in someone’s life,” he said.

Geography influences support levels for a higher minimum wage. Small business owners in the Pacific region (Alaska, California, Hawaii, Oregon, Washington) and the mid-Atlantic (New Jersey, New York, Pennsylvania) are among the most in favor of a federal minimum wage of $ 15 , and also among those most likely to say they won’t have to raise wages or lay off workers to comply with the proposed change.