Adjusting to Cost Increases
» Adjusting to Cost Increases, Volume 1, Issue 4, 2001
Suppose you know that SIX MONTHS from now your payroll costs, i.e., the costs of wages AND benefits, are going to rise 15 percent rather than 5 percent.
2. What is the most likely step that you would take to pay for this 15 percent payroll cost increase? Would you:?
| Response | ||||
|---|---|---|---|---|
| 1 | Raise prices | 37 | ||
| 2 | Lay-off some employees or not fill existing vacancies | 19 | ||
| 3 | Absorb it with lower earnings or profits | 11 | ||
| 4 | Freeze or cut employee wages or benefits | 9 | ||
| 5 | Cut, eliminate, or delay business investment | 9 | ||
| 6 | Do a combination of steps | 2 | ||
| 7 | Do nothing | 6 | ||
| 8 | Go out of business/Sell the business | 3 | ||
| 9 | Increase business volume | 1 | ||
| 10 | Other | 2 | ||
| 11 | DK/Refuse | 2 | ||
| Total (%) | 101 | |||
| N | 367 | |||
Notes: Thirty-seven (37) percent of small employers faced with a 15 percent payroll cost increase in the next six months would raise prices as their first action in response (Q#2).
