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Survey Shows Mandating a Minimum Wage Increase Will Hurt Employees and the Economy

Contact:
Matthew Haller, 202-662-0770
Blair Holmes, 202-463-5682
mhaller@franchise.org
bholmes@uschamber.com

WASHINGTON, Dec. 5—Research released today from the International Franchise Association and the U.S. Chamber of Commerce highlights the unintended consequences of raising the minimum wage, including fewer jobs, reduced hours for workers and slower economic growth. Moreover, the research highlights that employers will make these and similar personnel decisions that will negatively impact workers commensurate with the size of the increase in the minimum wage, whether to a “living wage” of $15 an hour or more, and even to a lesser increase to $9 an hour. Additional personnel decisions would include less entry-level hiring, scaling back on training, raising prices, automating parts of the business and curtailing efforts to grow and expand.

“Proponents of mandated living wages set at $15 an hour ignore the fact that this policy will jeopardize opportunities for entry-level workers to gain the skills they need to move up the employment ladder,” said IFA President & CEO Steve Caldeira. “Such a drastic move will hurt the very people the policy was originally intended to help.”

Franchise and non-franchise businesses invest in training programs designed to give entry-level workers the skills they need to grow. In fact, research shows the majority of managers began as entry-level hourly workers and two-thirds of minimum wage workers receive a raise within a year.

“Companies pay competitive wages and invest in training so their employees can bring more value to their business and take home more money,” said Randy Johnson, senior vice president of Labor, Immigration, and Employee Benefits for the U.S. Chamber of Commerce. “Our survey shows unequivocally that the result of mandating a higher minimum wage will be employers making various decisions that will reduce economic opportunities for low-skilled employees.”

The survey research was conducted by Public Opinion Strategies among businesses, franchised and non-franchised, employing between 40 and 500 people. The economic impact of the audience surveyed is significant: accounting for more than 42 million jobs, more than a quarter of all employed Americans.

Key findings include:

  • Sixty-eight (68) percent of franchise decision makers and 50 percent of non-franchise decision makers will make adverse personnel decisions to adjust to a $9.00 per hour minimum wage.
  • To adjust to a "living wage" of $15.00 per hour, 86 percent of franchise decision makers and 72 percent of non-franchise decision makers will make adverse personnel decisions.

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About the International Franchise Association
The International Franchise Association is the world's oldest and largest organization representing franchising worldwide. Celebrating over 50 years of excellence, education and advocacy, IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising. Through its media awareness campaign highlighting the theme, Franchising: Building Local Businesses, One Opportunity at a Time, IFA promotes the economic impact of the more than 825,000 franchise establishments, which support nearly 18 million jobs and $2.1 trillion of economic output for the U.S. economy. IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law and business development.