Adjusting to Cost Increases
» Adjusting to Cost Increases, Volume 1, Issue 4, 2001
Suppose your payroll cost increase was going to be 15 percent next week rather than 5 percent.
5. What is the most likely step that you would take to pay for this 15 percent payroll cost increase that begins next week? Would you:?
| Response | ||||
|---|---|---|---|---|
| 1 | Raise prices | 19 | ||
| 2 | Lay-off some employees or not fill existing vacancies | 18 | ||
| 3 | Absorb it with lower earnings or profits | 27 | ||
| 4 | Freeze or cut employee wages or benefits | 9 | ||
| 5 | Cut, eliminate, or delay business investment | 9 | ||
| 6 | Do a combination of steps | 0 | ||
| 7 | Do nothing | 4 | ||
| 8 | Go out of business/Sell the business | 4 | ||
| 9 | Increase business volume | 0 | ||
| 10 | Other | 5 | ||
| 11 | DK/Refuse | 5 | ||
| Total (%) | 100 | |||
| N | 367 | |||
Notes: Nineteen (19) percent of small employers faced with a 15 percent payroll cost increase in the next week would raise prices as their first action in response (Q#5).
