The ongoing discussion across our country about raising the current $7.25 federal minimum wage has led to debate and discussion among economists, political leaders and citizens.

The federal government has proposed two options for increasing minimum wage by January 2016.

An increase in minimum wage affects everyone, not just people who get paid the minimum, said Professor of Economics Keith Malone.

What will happen to the cost of living if minimum wage goes up?

“An increase to the minimum wage will force the cost of living up because employers will pass that expense onto the consumer,” Malone said.

Although the cost of living is always rising, increasing minimum wage will make prices rise more rapidly. When businesses are required to pay their employees a higher salary, they will raise their prices, he said.

“Then it’s like people are paying their own wage increase because they’re paying more to get more pay,” Malone said.

Another question that arises is whether wages are growing faster than the cost of living rises, he said.

In some cities, higher minimum wage values have lower buying power because the cost of living so high, according to the National Center for Policy Analysis.

For example, “San Francisco’s $10.24 per hour minimum wage buys only $6.35 worth of goods,” according to the National Center for Policy Analysis.

Because Alabama is one of five states that do not have a state minimum wage established, the federal minimum wage is enforced.

How does this increase affect us?

In the state of Alabama, legislation is calling for a $2.55 increase to establish a state minimum wage of $9.80. If the bill is passed in the Alabama Legislature, citizens will vote on a constitutional amendment to establish a state minimum wage in the November elections. The increase would take place in three 85-cent steps by January 2016.

On average about one to three percent of teenagers and college students will lose their jobs for every 10 percent increase in the minimum wage, Malone said.

“About half of minimum wage workers are younger than 25,” according to National Center for Policy Analysis. Minimum wage workers are also more likely to be never-married, part-time workers, according to the National Center for Policy Analysis’s research.

Most college students would fall into at least these categories, Malone said.

“Businesses have two options when they can’t afford to pay their employees,” Malone said. “One is to cut back on the number of employees, two is to increase prices.”