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Impact of Minimum Wage Increase

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Updated: Fri 5:12 AM, Feb 15, 2013

One of the big topics in the president's State of the Union address was raising minimum wage for employees to $9.00 an hour. That's nearly a $2.00 increase from Virginia's $7.25 minimum wage rate.

Some people say it's going to fix the economy, while others say it's going to hurt it.

Lisa Bean has been with her current job for seven years and says right now, she only makes $1.25 more than when she first started.

"I pay my car payment and groceries for the house," said Lisa.

Just like that, one week of pay for her is down the drain. A full-time worker in Virginia making minimum wage earns $15,080 a year. Divide that by 52 weeks and that's $290, before taxes.

It's simple math, increasing minimum wage, means more money for Lisa.

"It would help," she said. "I mean I think they would probably take more taxes out, but other than that, my paycheck would go up."

But Lisa's employer says it's not as simple as it seems. He didn't want to talk to us on camera but says, the increase to $9.00, only means an increase for everything else, which will result in a never-ending cycle.

President Obama disagrees. "Broad-based economic growth requires a balanced approach to deficit reduction, the spending cuts and revenue and with everybody doing their fair share," he said, during his address Tuesday.

Obama believes an increased minimum wage approach for businesses will mean more money in customer's pockets.

If Lisa gets a raise and starts making $9.00 an hour, she says, it'll still go to the basics.

"Put it towards my bills," she said. "With groceries going up, it'll be a lot easier to pay for the groceries."

Despite Lisa's current situation, she considers herself grateful. She realizes that things would be even more difficult without her husband.

"He has a decent job, and I'm very lucky for that," she said. "There are a lot of people out there who don't have that."

Lisa's employer also adds that there are government assistant programs available to help people who don't make enough money to support their families.

The federal government considers a person at the poverty line living in a house with two people and making $14,570 a year.


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