How would you like a raise at work? Well for millions of Americans, no matter how their boss feels about it, they’ll get one -- an 11 percent increase in their paycheck starting Friday when the federal minimum wage goes from 6.55 an hour to 7.25.
But it’s the timing of this mandate that has us interested. Our research found different perspectives on the potential impact of increasing the minimum wage during a recession.
First, we go WISH-TV in Indianapolis, who talks with the graduate director at Butler University’s College of Business. He says the increase in pay will only increase Indiana’s already 10.7 percent unemployment rate.
“It will disproportionally impact young people and minorities, and small business owners are going to be in a position where it remains to be seen whether they can continue to pay these people or if they’ll have to try and get by with fewer of them.”
But Pacific News Center in the U.S. Territory of Guam, talks to its Chamber of Commerce Chairman, who points out that Congress passed the increase two years ago, so businesses should be ready.
“It was expected, the business community, those that are on top of their games, have already assimilated this and realized it is something that is going to impact them, so I don’t foresee a significant impact.”
But what about states that already have a higher minimum wage? Well, we looked at WILX in Michigan, where Democrats are now proposing a 10 dollar minimum wage. The head of its Chamber of Commerce isn’t happy.
"Everyday a small business owner is trying to keep their business afloat in Michigan and the Chairman of the Democratic Party has kicked them in teeth.”
No matter the amount, a columnist in the Chicago Tribune says it will also be bad for consumers, who could see price increases that are ultimately bad for business.
“If American consumers were willing to pay more for American cars, dealers would already be charging higher prices. This is such an obviously boneheaded idea that no one would ever dream of doing it. But in the realm of employee compensation, the federal government is taking that absurd notion and putting it into law.”
Or perhaps extra cash will get consumers out shopping again. A reporter for NPR examines that possibility after talking with various economists and working mom Jamie Clark.
“Many of these economists, like Eileen Appelbaum at Rutgers, believe Jaime Clark is right, if low wage workers like her have a bit more money to spend, that’s good for the economy in a recession.”
So do you think the minimum wage increase will help or hurt the U.S. economy?
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