Minimum-Wage Hike May Cost More Than It's Worth

It is a scenario that doesn't improve the economy, in Dunkelberg's view: "You have destroyed young, unskilled people from getting a job forever."

He also says that while the minimum wage increase would impact the fast-food conglomerates such as McDonalds (MCD Quote) or Burger King (BKC Quote), the pain is greater for the small mom-and-pop businesses that, in the aggregate, hire many more people in a small town than the fast food places do.

On the Other Hand...

Mark Weisbrot, co-director of the Center for Economic and Policy Research, disagrees, saying the wage increase does not affect unemployment.

"Unemployment is a macro economic phenomenon, not a micro phenomenon, so employment is determined by the level of demand at the economy-wide level, and not by the level of wages in any particular industry. Obviously, if you raised it enough, you could get some impact on unemployment -- but it's so small."

"Most places around the country, you can't even hire people at that wage," Weisbrot says. "Wages have not kept up with productivity within the last 30 years, so what you're looking at is catch-up."

The wage increase this year is hitting 26 states around the country that must adjust their state's minimum wage to equal the federal one -- if it is higher than the state's.

Many states have minimum wages already set higher than the federal standards. The three highest are California and Maryland-- both at $8.00 an hour -- and Washington, where it is $8.07.