Some say minimum wage increase more harm than good

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News 12 at 11 o'clock, July 24, 2007

AUGUSTA, GA---For the first time in a decade the federal minimum wage is going up from $5.15 to $5.85 an hour. "That's a blessing," said Patricia Williams. It's the first of three 70 cent increases that will bring the minimum wage to 7.25 an hour by the summer of 2009.

According to the Economic Policy Institute, since the last federal minimum wage increase in 1997 the cost of living has shot up 26% while the minimum wage has fallen in real value. "I think it's too little, look at price of gas now, it's like $10 shy of where it should be," said Steven Gray.

But small buisness owners like Marcie Springer at Buck's Pizza, say it's only going to cost you more dough. "It forces prices of everything to go up from pizza to probably higher delivery charges just to compensate for the increase," she said. While it may initially look good to her employees who think they'll have bigger paychecks, in the end they won't because she says she'll have to cut hours to make up the difference. "It's one of those things we'll have to see," she said.

While some say the increase is long overdue others call it a short-sighted solution to a long-term problem.

The government says more than 1.5 million American workers made the old minimum wage of $5.15 an hour.

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