COLUMBIA, Mo. - The effects of a state minimum wage increase to $12 by 2023 will likely be mixed, a local economic expert said Wednesday.
The Missouri Department of Labor announced Monday that it had set the minimum wage at $8.60 starting Jan. 1 after voters this month approved an initiative mandating the increase.
According to the University of Missouri economics professor Aaron Hedlund, there will be winners in the process.
"Some people will keep their jobs and they will get a pay increase and that will be very helpful to them,' Hedlund said.
But he said there will also be losers.
"The negatives would be that there will be a bunch of people that will have hours cut, some of them may lose their job, some people trying to enter the labor force won't get their foot on the end of the ladder," Hedlund said.
He said Seattle raised its minimum wage to $15 and has seen some negative consequences.
"It's been counterproductive in some ways," Hedlund said. He said hours have been cut and job growth has slowed down.
Hedlund said the increase might drive up prices at local businesses.
"Businesses will partially respond by increasing prices. But I don't expect that to be a dramatic increase," Hedlund said.
Local business owner Lili Vianello of Visionworks Marketing Groups said she's not worried about the short-term, but in the long-term, there could be major changes.
"It makes me wonder if I will still be paying an intern to work here. Certainly, there's an option of not paying our interns or not hiring an intern, but as of now we pay our interns," Vianello said.