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INDIANAPOLIS – As President Obama pushes to raise the minimum wage for all Americans, some fear the increase could backfire and have a devastating effect on small businesses.

President Obama has already announced he will sign an executive order to increase the minimum wage from $7.25 to $10.10 an hour for workers under new federal contracts.

Supporters of the increase believe that would dramatically change lives by adding more money in American pockets, but critics say it could also have an adverse affect.

“Small businesses like us, we’re trying to hire more people. It’s just like so hard,” said Nara Magsar, a manager at Tegry Bistro on W. 86th St.

While she admits her employees are currently making above the current minimum wage, the thought of it rising would put pressure on the business to follow suit and pay its employees even more.

“If I pay $10 an hour and the minimum wage is $10, you know they [think ‘They] have to pay me more, right?’,” she explained.

“Probably one of the worst thing you can do for the economy is raise the minimum wage,” said Dr. Matt Will, a financial economist, who teaches at the University of Indianapolis. He believes raising the minimum wage almost always spells bad news.

“It’s very politically popular. Everybody wants it to happen. But the reality is, it destroys jobs,” he said. “If I said to you, ‘You have to pay 40% more to all your workers,’ you’re probably gonna lay off a few people.”