This marks the third year in a row in which the minimum wage has been raised by 70 cents, going from $5.85 in 2007 to $6.55 in 2008 to the current $7.25. Ten years ago, the minimum wage was $5.15.

State minimum wage laws differ from state to state, but Texas’ minimum wage is equal to the federal rate. Many states, such as California, Vermont and Washington have state minimum wages that are higher than the federal wage rate.

But is increasing the federal minimum wage during a recession a good idea? Yes and no, said Aimee Chin, an associate professor in the department of economics at the University of Houston.

“There will be winners and losers,” she said.

Chin said previous research is mixed on the positive and negative effects of increasing the minimum wage, but that it should help people who still have a job. The concern is whether it will cause employers to hire fewer people.

“Typically who gets hurt first are people who are minimum wage workers — teenagers, and people with less education and experience,” she said. “The most vulnerable people are the ones who will be hurt, because at $7.25 an hour an employer will not want to pay this much and might be able to find a worker with more experience they would be more willing to pay that to.”

As for the impact on small towns like Magnolia and Tomball, “It depends,” Chin said.

“If a lot of the employment is at the minimum wage it could have a material impact,” she said. “In areas where there are higher wages for skilled jobs like downtown Houston, they may not experience more of an impact.”

Although, she added that the increase may have a bigger impact on larger corporations that do not only pay minimum wage.

“The fraction of jobs at minimum wage isn’t that high,” she said. “We’re probably more concerned about layoffs at major firms, like Continental.”

Chin said fast food restaurants are heavily impacted by the wage increase but waitstaff, which rely on tips, are not affected by the legislation.

“McDonalds pays somewhat above minimum wage but it will still affect people,” she said.

The impact on health care could take a toll for families, as well.

“Giving rising health care costs, employers will hire more part-time to avoid higher costs,” she said, and working only part-time can mean no health insurance coverage.

“This is a tough time for employers, who could cut the number of jobs, or cut full-time jobs with benefits to part time jobs with no benefits to contain their wage belt,” she said.

The wage increase is important to society in a bigger sense, but it will still produce negative effects in the short-term, Chin said.

“In the long run it’s probably the right thing to do, but right now in these economic times, if there’s job loss it could be very painful.”

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