Twenty-one states are set to raise their minimum wage when the clock strikes midnight New Year’s Eve. That means employers in more than half of the country will be required to pay employees more than the federal minimum of $7.25 per hour. The increases are expected to affect the hourly wages of 2.4 million workers by up to $1 to an average of $8.00.
Interestingly, the latest ally in the movement to raise minimum wages across the country won’t be found outside in picket lines. A new study finds strong support among Americans with investable assets of $1 million or more for the federal wage floor to rise.
Ninety-one percent of millionaires think the current federal minimum wage is too low and 62 percent support raising the federal minimum wage from $7.25 to $10.10 per hour.
Not surprisingly, party lines make a difference. Only 39 percent of Republicans support the federal bump to $10.10 compared to 93 percent of Democrats and 59 percent of Independents. The wealthy also think most states have a minimum wage that is too low. Two-thirds of the millionaires surveyed in the 23 states with a minimum age that is above the federal minimum, believe in a minimum wage above $10 per hour.
While this is just a survey of 500 people, it provides interesting insights into how the wealthy feel about higher minimum wages. However, what’s missing is why and how they think the raises would impact their own earning potential.
The CNBC Millionaire Survey numbers are in line with the way America's total population feels about raising the minimum wage. Sixty-five percent of Americans support raising the minimum wage, according to most recent NBC/Wall Street Journal Poll.
When asked, "What is a fair minimum wage?" only 47 of the 500 millionaires surveyed gave a number at or below the current federal minimum of $7.25 per hour. All other respondents gave a fair wage above the federal minimum, with 38 percent saying the wage should be higher than the $10.10 wage proposed by President Obama in his State of the Union Address in January.
"I think these respondents just aren't aware of where the starting line is," said George Walper, CEO of Spectrem Group, which polled 500 Americans with investable assets of $1 million or more for CNBC. "They support raising the wage to $10 an hour because they don't realize it's so low to begin with," Walper said. "If we had framed it as 'Do you support a 30 or 40 percent increase in the minimum wage?' we might have had more people saying no."
Only 12 percent of millionaires said raising the wage should be Congress' top priority next year. The issue landed a distant fourth place behind corporate tax reform (24 percent), immigration reform (22 percent) and repealing the Affordable Care Act (20 percent).
Perhaps what is most interesting about this survey is that, despite the support for a higher minimum wage, there is misunderstanding about the details of this issue. The pollsters noted that the topic is “extremely emotional and political” such that people are responding not based upon facts but what seems to be fair intuitively.
That emotional appeal is what advocates prey upon. The pictures we see from the protests are of little kids with signs about how low the minimum is. Despite the fact that most people who earn minimum wages are not raising their families on it, but are instead teens and young people starting out their careers, what the President and other proponents paint is a very different picture.
As we know, emotion moves people to action, but impacts are what matters and we’ll see the impacts in communities where the minimum wages are set to rise this week. When employers begin to cut workers’ hours or lay off workers, the support for minimum wage hikes may pour cold water on these protests and expose the fallacious arguments for what they really are.