How does minimum wage increase the economy?

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RAPID CITY S.D. (KEVN TV) - South Dakota will raise minimum wage from $8.85 cents to $9.10 cents an hour. State officials say the minimum wage is annually adjusted by any increase in the cost of living, as measured in the Consumer Price Index published by the U.S. Department of Labor. This year's increase was 2.7 percent.

For some businesses, can they keep the amount of employees with the rate continuing to grow?

"There's probably some job loss there. Even thought it's not significant especially for the smaller types of minimum wages you might see in places like South Dakota," says Ron Debeaumont a professor of economics at Black Hills State University.

We see large corporations doing this across the nation, in February Walmart raised its starting wage to $11, in March Target planned on raising to $12.and Amazon setting their rate at $15.

The federal minimum wage remains at $7.25 not changing since 2009. But how do these numbers help with the gap between being wealthy and living a life of poverty?

"The evidence seems to suggest increases the minimum wage reduces that gap. It moves money down the income chain towards the lower income families," says Debeaumont.

The hourly minimum wage for tipped employees will be $4.55/hour effective Jan. 1, 2019, half the minimum wage for non-tipped employees. Wages and tips combined must equal at least the minimum wage.