Impact of higher wage on local economy

SPRINGFIELD, Mass. (WWLP) – It’s controversial: the President’s plan to raise the federal minimum wage to more than $10 an hour. But people 22News talked to hope a higher minimum wage will mean more consumer spending.

President Obama traveled to Central Connecticut State University on Wednesday to push for an increase in minimum wage from $7.25 an hour to $10.10 an hour.

He told the audience, “Nobody who works full time should ever have to raise a family in poverty.”

Kevin Babcock is a student at Western New England University. He told 22News, “They are not really giving too much back to the economy. They are just buying what they downright need, the bare necessities. With $10.10, they have a little bit of extra pocket money, and I think that’s going to help in the long run. “

Here in Massachusetts, the state Senate approved back in November a bill to raise the state minimum wage from $8 an hour to $11. That increase, if approved by the House as well, would take effect gradually over three years.

The state and federal proposals have business owners concerned about their costs, but Economics Professor Karl Petrick told 22News a long-term effect should be positive.

He said, “The majority of people that this higher minimum wage will help are going to spend their money locally, so this could have a big, positive impact on their sales. Even if it affects them in terms of paying higher wages, they could see a bigger positive impact.”

State lawmakers have not taken any additional steps yet on the state proposal to raise the minimum wage. The federal proposal will need approvals from both houses of Congress.

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