Raising Minimum Wage: A Good Thing?

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RENO, Nev. -- You often hear grumblings of "job killer" when people talk about raising the minimum wage. In his State of the Union Address last month, President Obama proposed raising the minimum wage from $7.25 to $9, but many argue that this could mean trouble for employers and small businesses. A local economist discusses the effects it would have.

Steve Mathers has been working at Pub 'N' Sub for 38 years and has experienced all the ups and downs of the changing economy. As a business owner, he does everything he can to keep his workers.

"We don't tend to hire based on what a minimum wage is, we tend to hire based on the amount of employees we need to do the job," he said.

Some employers are worried the minimum wage hike could put them out of business and hurt many young job seekers.

"High school students say who are going to be looking for part time work this summer, people trying to get their first job will have more difficulty finding a job at a higher minimum wage," University of Nevada, Reno's Economics Department Chair, Elliot Parker said.

However, people who are out of school and have to make a living off their income would benefit Parker says.

"Raising their income can help reduce the amount we pay as tax payers to support them through social services."

The minimum wage in Nevada is $8.25, which is higher than the national wage. Economists say raising the wage would actually help our economy because the more money people have the more of it they'll spend. Mathers says for every new dollar spend there is an additional three dollars made in the economy. Parker says the hike could also offset the higher cost of labor.

"Workers who are paid better tend to be a little more motivated and a little more productive," Parker.

Mathers says he isn't too worried about the increase in affecting his business; he's even looking to hire more in the spring.

"Nevada is coming out of a recession, like we got hit harder than most people and we're starting to come out of that too."