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Will an increase in minimum wage grow unemployment?

Posted on April 5th, 2013 Read time: 1 minutes

The House recently voted down part of new legislation proposing an increase in minimum wage. The rest of the bill, Supporting Knowledge and Investing in Lifelong Skills (SKILLS), went on to the Senate, but many companies and payrolling services believe the minimum wage battle is far from over.

Earlier this year, President Barack Obama proposed the federal minimum wage to rise from $7.25 to $9 an hour, causing many economy experts to voice their concerns over whether the increase will force small businesses to cut workers. Dissenters of the plan to increase minimum wage cite research from the Employment Policies Institute (EPI) that found the rise would lead to higher unemployment.

However, advocates of the proposed plan report other EPI studies showing minimum wage needs to follow economic inflation to maintain quality-of-life standards.  

Although the minimum wage section of the SKILLS bill was declined, supporters of the rise plan to continue striving to get legislation through Congress.

The potential change could impact the hiring plans of small businesses and HR administrations across the country in a variety of ways, and companies might want to consider outsourcing payrolling to keep within budget and avoid having to layoff workers. 

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