As a United States citizen, I still think minimum wage is too low. It's pathetic that it's been ten years since the last minimum wage raise. Finally, after months of delays, President Bush signed the minimum wage increase into law in May (from $5.15 to $5.85 and going up to $7.25 within two years), and that increase is finally taking effect. 
As I mentioned, my first reaction to the increase was that it's still too low for anyone to live a decent life on, but then I looked at it from a business perspective. My first reaction from that perspective made me think of price increases and lost jobs as more jobs go overseas, so companies won't have to take a hit in profits. Then I looked at this from a marketing perspective and could see the inevitable budget cuts.
Sadly, the marketing budget is always one of the first to get cut when net income goals are not met or in jeopardy. Large companies who employ a lot of minimum wage workers will look to each business unit and department to make cuts, and marketing programs will be one of the easiest targets. It's unfortunate but true. We're always on the chopping block as marketers. It's no secret that being a marketing executive is considered one of the riskiest jobs in Corporate America with jokes of Chief Marketing Officers' office doors being replaced with revolving doors. The CMO is too often the fall guy (or girl).
What do you think? Are marketing budgets at risk due to the minimum wage increase? What other measures will companies take to offset the cut in their profits?
Read more about the minimum wage increase from the Know More Media network of business blogs:
Ireland's Solution Could Double US Minimum Wage
The Cold, Hard, Ugly Truth About the Minimum Wage Increase
Minimum Wage-Working Full Time & Homeless
You make a good point about the marketing department being blamed for any loss in revenue. I've seen that happen even when companies do relatively well.
Posted by: Laura | July 27, 2007 6:39 AM | Permalink to Comment