State of the Union: President Obama Faces Divided Small Business Community on Wage Hike

President Obama has pledged to tackle inequality in the US during his State of the Union address, but has not pushed for a federal minimum wage rise.

Although Obama is expected to sign an executive order for government contract workers, which will boost their pay from the minimum federal rate of $7.25 (£4.37, €5.30) per hour to $10.10, he called on Congress to approve a raise.

But a poll from CNN, which questioned 1,278 employers, revealed small business owners in the US are divided over a potential country-wide increase in the minimum wage.

Almost half (49%) of employers, for instance, said they do not support a proposal to raise the federal minimum wage, but 44% said they support a wage hike and the remaining 7% were unsure.

However, a vast majority (95%) of respondents agreed that $7.25 is not a living wage and only 7% said they pay any of their workers that hourly rate or the minimum set by their state.

But the research also revealed more than 20% said they pay some employees between $7.25 and $10.10 an hour.

That means if a federal wage hike is passed, these small business owners would have to raise wages for employees in that range.

In addition, the study found nearly three in ten (26%) of small business owners said a hike to $10.10 would cause them to cut back on employees or their hours and almost a third (32%) said they would be forced to raise their prices.