If a proposed change to the federal minimum wage to $15 per hour becomes law in the United States, it may not have a huge impact on the payroll budgets for companies in the poultry industry, but it is likely to still have an economic effect on the industry.
During the Poultry Market Intelligence Forum, held January 27 as part of the International Production & Processing Expo (IPPE) Marketplace, economist Dr. Paul Aho, Poultry Perspective, was asked his about his thoughts on what a higher minimum wage would mean for the industry.
Earlier in the week, bills were introduced in both the U.S. House of Representatives and U.S. Senate to gradually hike the federal minimum wage from $7.25 per hour to $15 per hour over the next five years. The proposed legislation aligns with a January 22 executive order from President Joe Biden, which directed the Office of Personnel Management to develop recommendations to increase the minimum wage for federal employees to $15 per hour.
While the legislation, if it becomes law, would more than double the minimum wage, Aho pointed out that poultry industry wages would not necessarily increase by such a high percentage.
“We’re paying much higher than that. It’s certainly not a doubling of wages in poultry industry,” he said.
But, if the U.S. minimum wage does double, Aho acknowledged, it might have an impact on supply and demand economics of the poultry industry.
“It could have an effect on restaurants,” Aho said.
If restaurants in the United States were required to raise wages for their employees, they may have to pass some of those costs on to the consumers, which could lead to a reduction in restaurant traffic.
“So, it could be a little bit of a drag on chicken demand,” he said.
According to a House fact sheet, wages for tipped workers, such as many restaurant servers, under the legislation would rise gradually to $14.95 per hour in 2026 from the current $2.13 per hour.
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