The following was excerpted from NPR.org. To read the full article go to NPR.org.
“This Friday, the federal minimum wage will rise to $7.25 an hour, up from $6.55.
Conservative economists are worried that the government-mandated raise will force small businesses to lay off workers. They note that the job market has deteriorated since Congress approved the 10.7 percent pay raise two years ago. In the summer of 2007, the U.S. unemployment rate was running at about 4.7 percent. Today, it is 9.5 percent. Mandating higher wages could force some employers to cut jobs, the argument goes.
But liberal economists say this summer is the perfect time for a wage hike: It will put more money into the pockets of people who need it most. Fatter paychecks will stimulate spending and help the economy, they say. Kai Filion, a policy analyst for the Economic Policy Institute, a left-leaning research group, says this wage hike will generate $5.5 billion in consumer spending over the next 12 months.”
To read the full article go to NPR.org.