Hike in minimum wage would have bad ripple effects

I’m sure that President Obama’s proposal to increase the minimum wage sounds great to many, if not most, of his supporters. Who wouldn’t rather make $9 an hour instead of $7.25? The problem, however, is that Obama does not seem to understand how such an increase would be implemented by businesses.

As one who has managed a payroll for several companies over the last 30 years, I can tell you that businesses cannot and will not be directed by the government to spend more in employee wages than they want to. If the minimum wage goes up significantly, minimum wage hours would go down accordingly.

Some companies would lay off a few people, some would reduce payroll hours across the board, and some would do both. Some small businesses will no longer be viable.


None will just increase payroll to accommodate the law. They will simply make do with less help as best they can.

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