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The president, during his fifth State of the Union address, proposed increasing the hourly rate from $7.25, saying those workers currently have an annual salary of $14,500.
That attempt to boost annual salaries would likely have quite an impact on a service based economy like New Orleans.
"It will affect a service based economy more than it will affect manufacturing or other areas," says UNO economist, Dr. Dub Lane. "We operate with more people at those low income levels."
He says that's because of our high level of dependence on tourism.
And, that means the hospitality industry would likely see the greatest impact. "Because they do employ a lot of people at that lower wage. And, if they have to raise the wage, they'll just hire fewer of them," says Lane. "That's the law of supply and demand."
"Any time you raise the minimum wage, that will cost some jobs," Lane says.
He doesn't think employers would start firing people right away, but they'd be less likely to replace those who leave.
LSU economist, Dr. Jim Richardson, agrees.
"Those companies work on a very low margin, so that's one of the elements they have to look at very carefully," says Richardson.
"It will probably make them rethink the number of people they need to work for them...the number of waiters they might have, the number of bellmen they might have, the number of cleaning people they might have, and on down the list."
So, New Orleans may end up with higher paid employees in the service industry, but they'll be fewer of them.
"Will it hurt the industry? No. It's more likely to hurt people who might go into that line of work as a way of starting out their careers...younger people, or people who simply do not have the right amount of training to do other types of jobs," says Richardson.
House Majority Whip Kevin McCarthy said Obama's plan would not have the desired effect of getting Americans off government support and improving the economy.
The California Republican said increasing the wage would instead put more strain on small business, a huge job creator in the U.S. economy that has struggled now for years.
