The President and other supporters cling to the flawed economic thinking that if you raise the minimum wage (to $10.10 or higher) there will be only good economic results.

 Basic supply and demand denies this as do a host of economists, including the nonpartisan Congressional Budget Office (CBO) which found that a $10.10 minimum wage would cut as many as 1 million American jobs.

Now, a survey of CFOs finds that they will they lay off workers or forgo hiring and shift toward using robots or technology that allows them to maintain productivity with fewer employees. They say a minimum wage hike from the current $7.25 to $8.75 is manageable but a hike to $10 and $15 an hour would result in immediate layoffs and significant curtail of future hiring.

Nearly half of all companies surveyed also indicate they have or soon will implement labor-svaing technology. Low-skill jobs –which earn minimum wage are most at risk.

These are the unintended consequences of misguided policy that boosts pay for a few but risks short term and long-term employment of many.

Here are more findings from the survey:

·         Few affected firms would lay off current employees if the minimum wage is increased to $8.75 but 46 percent would lay off employees at $15.

·         Future employment growth would be curtailed at 35 percent of affected firms if the wage were set at $8.75, while two-thirds would curtail future hiring at $15.

·         Nearly 20 percent of affected firms would reduce employee benefits or increase product prices if the minimum wage were increased to $8.75; approximately half would do both at $15.

·         In general, firms indicate they could reasonably accommodate a modest hike in the minimum wage to $8.75 but substantial negative consequences would kick in as the wage approaches $10.

·         An ongoing shift away from labor and towards machinery will accelerate if the minimum wage is increased.

“It is important to put these findings in perspective,” said John Graham , a finance professor at Duke’s Fuqua School of Business and director of the survey. “For one thing, these results primarily apply to employees who currently earn less than $10 per hour, which is about one-fourth of the U.S. workforce, according to the Bureau of Labor Statistics. Among firms employing these low-wage workers, the expected effects of proposed minimum wage hikes are dramatic…”

I hope that the President, labor unions, and fast food protestors read this survey.

Their arguments pull at the heartstrings. They say no one can or should raise a family on minimum wage, and it would be difficult to do so. Minimum wage, however, was meant to be an entry level pay. Most minimum wage earners are young people who are just getting their start in the marketplace. The goal is for them to advance in their jobs or move on in their careers. There’s a serious problem if someone has been living on minimum wage for years.

As we’ve explained, raising the minimum wage actually harms low-wage workers who suddenly become more costly to keep. While one worker gets a boost another may be laid off or a position never filled. As this survey indicates, more minimum wage workers may just find themselves out of work entirely as machines replace them. That’s moving from not making enough to making nothing at all.

Businesses will also pass higher costs on to customers in the form of higher prices. Budgets are already tight for Americans. We don’t need to spend more to buy eggs and milk or a box of chicken nuggets. And let's not forget the small businesses operating under skin margins. They can hardly afford a dramatic rise in labor costs. As we've reported, in response to a wage hike in Seattle businesses have instituted added fees to pass along the rising operating costs.

What we should focus on is ensuring that workers build skills in areas where there are opportunities that help them to earn more.

Some cities on the West Coast have raised their minimum wage to $15 and one California state representative wants to raise the state minimum wage to $15 an hour. I hope they’re ready for the economic fallout of unemployment skyrocketing among low-skilled workers.