A move my state legislators to increase the minimum wage might backfire, according to a Nebraska economist.
Economist Ernie Goss with Creighton University says a pay raise will obviously be welcomed my minimum-wage earners as long as they keep their job.
“Some of those individuals will lose their job and that’s just a fact,” Goss tells Kevin Thomas, host of Drive Time Lincoln on Nebraska Radio Network affiliate KLIN. “There will be job losses; those who are contributing less. The current minimum wage is $7.25. So, if you’re there and working and you’re not contributing $7.25 or more than that worth of benefits to the business, then you’re going to lose your job.”
Goss contends increasing the minimum wage puts pressure on businesses, especially those in the leisure and hospitality sector, which will results in lay-offs.
“A high proportion of the jobs that were created last month were in leisure and hospitality, so the job creation hitting right now is in those industries that will be most negatively affected by the increase in the minimum wage,” according to Goss.
Goss says past increases in the minimum wage have hit the youth job market hard.
“The increasing minimum wage, again it has gone up three times since 2007, has had a dampening impact on youth employment and increases in youth unemployment and that’s my real concern,” Goss says
A few state senators have come out in support of an increase in the federal minimum wage and have stated that if Congress doesn’t act to increase the minimum wage, they will introduce legislation in the Unicameral to increase the state minimum wage.