Pittsburgh (PRWEB) May 29, 2007
With the anticipated increase of the federal minimum wage, most small business owners across the United States foresee minimal impact on their business, except retailers who expect to raise prices and reduce hiring, according to the semiannual PNC Economic Outlook survey.
Among small and mid-sized business owners in all industry sectors, three out of four (76 percent) report the hike, which would increase the federal minimum wage from $5.15 to $7.25 an hour, will have little or no impact on their business within the first six months of enactment. The primary reason is that 72 percent already meet higher state minimum wage requirements, reports PNC Bank, a member of The PNC Financial Services Group, Inc. (NYSE: PNC).
More specifically, 77 percent would not raise selling prices while the vast majority would not reduce their existing workforce (88 percent), hiring plans (81 percent) or healthcare benefits (86 percent).
In contrast, 35 percent of retail and wholesale business owners say the federal minimum wage hike would 'greatly or somewhat adversely impact' their business within its first six months.
"Most small business owners have adapted to increased wage requirements to meet state requirements and to attract and retain qualified employees in a stronger job market. The retail and wholesale sectors, however, rely on more minimum wage workers and their profits will be pinched by this increase," said Stuart Hoffman, chief economist of PNC.
Among the concerned owners in the retail and wholesale sectors, the impact would be felt by customers and employees alike: 34 percent of these owners would raise selling prices and 29 percent would reduce hiring. In addition, 19 percent would cut existing employees, and 20 percent would reduce healthcare benefits.
The first federal minimum wage increase in 10 years is now included in the Iraq War funding bill expected to be sent by the U.S. Congress to President Bush for his signature this week.
For complete details of the national and regional survey results, visit http://www.pnc.com/eos.
The PNC Economic Outlook survey was conducted for PNC between January and March by Harris Interactive. It was done by telephone within the United States among 1,041 owners or senior decision-makers of small and mid-sized businesses with annual revenues of $100,000 to $250 million. The results given in this release are based on interviews with 528 businesses nationally, while the remaining 730 interviews were conducted among businesses within PNC's primary region. Quotas were established by company revenue using the Dun & Bradstreet population. The sample was drawn to include a representative sampling of businesses by region and industry. Sampling error for the national results is +/- 4.3 percentage points. Sampling error for the various sub-samples would be higher and vary.
Harris Interactive is the 12th largest and fastest-growing market research firm in the world. The company provides innovative research, insights and strategic advice to help its clients make more confident decisions, which lead to measurable and enduring improvements in performance. Harris Interactive is widely known for The Harris Poll, one of the longest running, independent opinion polls and for pioneering online market research methods. More information may be obtained at http://www.harrisinteractive.com.
The PNC Financial Services Group, Inc. (http://www.pnc.com) is one of the nation's largest diversified financial services organizations providing consumer and business banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.
This report has been prepared for general informational purposes only and is not intended as specific advice or recommendations. Information has been gathered from third party sources and has not been independently verified or accepted by The PNC Financial Services Group, Inc. PNC makes no representations or warranties as to the accuracy or completeness of the information, assumptions, analyses or conclusions presented in the report. PNC cannot be held responsible for any errors or misrepresentations contained in the report or in the information gathered from third party sources. Any reliance upon the information provided in the report is solely and exclusively at your own risk.