Hourly workers weigh impact of raising minimum wage

Hourly workers would favor an increase of the current federal minimum wage even if it means paying more for products and services as a result, according to The Employment Guide Hourly Employee Survey published by Dominion Enterprises.

Nearly two-thirds (65 percent) of hourly workers surveyed indicated that they would favor an increase in the federal minimum wage even if the consequence is higher consumer prices.

When asked if they would favor an increase in the federal minimum wage if it meant that a co-worker would lose his or her job, 50 percent of this same group said yes.

"Hourly employees understand that raising the federal minimum wage could lead to paying more at the cash register and a majority is prepared to do exactly that," said Sharon Sewell, senior director of marketing, communications and membership with the National Association of Workforce Boards (NAWB), Arlington, Va. "A smaller, but still significant number of people favor the increase even if job losses result. Taken as a whole, the data suggests that there is popular support for raising the minimum wage, as 31 states already have."

The U.S. House of Representatives and the Senate have voted to approve a bill to raise the federal minimum wage to $5.85 per hour. This legislation was vetoed by President Bush on May 1 because it was attached to the Iraq war spending bill. A revised bill with tax breaks and a minimum wage increase is expected to be sent back to the president. The proposed federal minimum wage increase is a three-step plan: The minimum wage will increase to $5.85 per hour 60 days after the bill is signed into law, then will increase to $6.55 per hour one year later, and to $7.25 per hour one year after that.

The findings are part of The Employment Guide Hourly Employee Survey published by Dominion Enterprises. Conducted in March, the survey was the second in a series, the first of which was released in January. The surveys will form the basis of a new quarterly index on hourly workforce trends.

Professor Christopher B. Colburn, Ph.D, chair of the Economics Department of Old Dominion University, Norfolk, Virginia, who reviewed the data, said, "Seeing layoffs in the workplace may create an uneasy realization for hourly employees that they could be next in line. However, I suspect that an increase in the minimum wage will not have a large effect on the labor market for incumbent workers, but rather that seasonal, part-time employment, and new entrants into the labor market may be more affected."

High Satisfaction, Loyalty, Tenure
The findings of the March survey of hourly employees support those of the January results in which hourly workers indicated they are optimistic that they could find a new job, but most are satisfied with their current job and are surprisingly loyal to their employer.

• 84 percent indicated they are satisfied with their current job compared to 78 percent in the January report.
• 82 percent would like to remain with a single employer for most of their career vs. 79 percent in the earlier sample.
• 65 percent have had no more than three jobs in the last 10 years compared with 61 percent in the earlier group.

The vast majority of hourly employees surveyed are happy being paid by the hour. When presented with the statement "I would prefer a salary instead of hourly pay", only 37 percent of respondents agreed with the statement.

Why Hourly Employees Leave
While pay rate is an important factor in why hourly employees leave a job, The Employment Guide Hourly Employee Survey revealed it is not the only reason. Hourly workers-who, according to survey results, earn an average of $14.25 per hour-are looking for an improved employment experience, including health benefits and flexible hours.

When asked which three features would be most important in considering a new job:

• 80 percent ranked pay rate as important.
• 58 percent said health benefits as important.
• 44 percent of hourly employees cite flexible hours as important.

"Hourly jobseekers have told us they are willing to stay with one employer. But loyalty has a price. Hourly employees want adequate compensation and specific benefits. To retain a high-quality hourly workforce, employers must include these factors in the total compensation package," said Jeff Littlejohn, vice president and general manager of The Employment Guide. "As the war for talent escalates, this will become increasingly important, especially for companies in the service industry which rely on their employees' relationships with their clients-and where maintaining a high quality, consistent workforce is of utmost importance."

New Hourly Employment Index Planned
The 19-question survey of 500 hourly workers was conducted online March 14 to March 20, 2007. The final sample represents the demographic profile of hourly employees based on Census and U.S. Department of Labor statistics for age, ethnicity and gender. The results can be projected on the hourly employment population of the U.S. with a margin of error of +/- 4 percent.

The Employment Guide Hourly Employee Survey published by Dominion Enterprises is conducted every quarter. Over time, the results will form the basis for an index that tracks hourly workforce trends in the United States.

Additional details from the survey-including pie charts and bar charts of key findings-can be found at both www.EmploymentGuide.com and www.DominionEnterprises.com.