Minimum Wage Jump Is A Mixed Blessing

The federal minimum wage goes up 70 cents today, from $6.55 to $7.25 an hour.

Backers of the increase say it's long overdue for millions of the nation's working poor.

But, there is a downside to change in the law.

American business is dependent on minimum wage labor. Not every company can afford to pay higher salaries and benefits. But those relatively low paying jobs are a great help to those with few skills..and to young people. The concern is that small businesses will have to lay off the same workers that the pay hike was meant to help.

MITCH COLLINS, CHIK-FIL-A "Mainly the minimum wage is going to affect my teenagers..that work for me..obviously that's going to impact probably 30 percent of our staff. "

That means that 70 percent of his staff is already over the new wage of 7.25 an hour. But the added expense caused by the minimum wage increase will likely cause a slight price increase.

MITCH COLLINS "In the economy we're in...are people going to accept that price increase?...it's a very difficult decision."

Economists say all these factors can add up to a higher inflation rate, meaning an increase in the minimum wage could actually prolong the recession.

But minimum wage advocates argue the wage bump....70 cents an hour... will keep more working poor afloat. Some students count themselves in that number. .

JONATHAN WYATT, UTC STUDENT "It's better than what I was making. So I'm not complaining...beggers can't be choosers."

DREANNE NEWTON, WORKS AT UTC "I'm getting paid by the university, but since they've also recently increased tuition..I'm inevitably paying that money back to the university."

JORDAN SPENCER, UTC COMPUTER LAB TRAINER "I don't care too much because I don't make minimum wage, however, I wish since everybody else's wages are going up..I wish mine would, too...but it's not happening".

The increase will have minimal impact in some areas.

Eighteen states and the District of Colombia already have minimum wages that are higher, or equal to $7.25 an hour.