Poll results show higher wage costs come with consequences

Tony Gagliardi NFIB
Tony Gagliardi NFIB

All’s quiet on the minimum wage front at the moment, but don’t think last year’s passage of Amendment 70 is any long-term cease fire. Advocates for higher rates will kick off the 2018 session of the Colorado Legislature with a push to let cities and counties set their own minimum wage rates.

New research put out by the National Federation of Independent Business is worth the attention of every Colorado policymaker. Small employers were asked how they advertise open positions, compensate employees, promote employees and deal with federal immigration requirements. But it’s their answers to questions about the minimum wage that are most valuable for state legislators.

Small employers were asked: Would a minimum wage increase to $15 phased in over the next three years have a negative impact, positive impact or no impact on your business?

Among all owners, 47 percent said the increase would have a negative effect and 5 percent a positive effect. Meanwhile,
39 percent said the change would have no effect and 5 percent said they didn’t know. The proportion of employers saying the higher minimum wage would have a negative effect increased along with the size of their staffs.

Taking the results from just employers with one to nine employees, the poll asked what action or actions owners would take to accommodate higher wages.

Fully 84 percent said they’d raise prices, while 69 percent said they’d forego filling open positions, 67 percent would decrease staffing and 62 percent said they’d cut employee hours.

In Colorado, Amendment 70 isn’t as draconian as the proposed minimum wage increase in the poll. Amendment 70 increases the rate by 90 cents a year until 2020, when it would reach $12 an hour. Still, the coping actions being taken now by small business owners are the same — mainly higher prices for consumers and loss of job opportunities.

It’s forever worth reminding everyone the minimum wage is earned by just
2.7 percent of the nation’s workers, according to the U.S. Bureau of Labor Statistics, and most of them tend to be young. In short, the minimum wage is an entry level wage earned mostly by teen-agers and young adults. One major effect of increasing the minimum wage is eliminating entry level jobs. Despite these facts, proponents of ever-increasing rates wrongly argue they’re needed to lift people out of poverty, even though little to no evidence exists to back it up.

Not content with passage of Amendment 70, minimum wage advocates now want the Colorado Legislature to allow local governments the ability to set their own rates, which would create a crazy quilt of minimum wage rates throughout the state and a commensurate paperwork migraine for every business.

If the results of the NFIB poll reminds of us of anything, it’s that costs have consequences.