Target plans to increase their minimum wage to $15 by the end of 2020, according to Target Corporations. According to an MSNBC report, by the end of October, the company’s goal is to pay employees $11 an hour. This is especially great for states paying minimum wage workers at or below the federal average of $7.25.

According to Pew Research Center, the current federal minimum wage is not enough to provide for families who want to make ends meet. Students who need to support their families are able to rely on a corporation like this to help with income and provisions necessary to live.

According to the University of Amherst Massachusetts, higher minimum wages would reduce poverty by 6 million people for young adults.

According to The Economic Policy Institute, if the rate of minimum wage increased to $10.10, there would be an increase in 85,000 jobs in a time span of three years. Especially since Target’s goal is to reach $15 per hour by 2020, with more low-wage workers earning more money, it would help create more jobs in the long run.

With Target taking these kinds of steps toward higher minimum wage, there will be an increase of production in the workforce which will contribute to better sales as well as higher profits.

According to Melody Hobbs of Ariel Investments, one of Target’s problems is in sales, and mentions how the new minimum wage proposal provides a better likelihood in less millennial employees leaving. For students that want better career experiences, that is where Target is taking a step in the right direction.

Although this increase seems as if it could benefit the economy because it moves entry level workers close to a liveable wage, the impacts are not all positive.

According to Target, there are currently 323,000 workers on their payroll qualifying as low-wage hourly employees. According to the Bureau of Labor Statistics, Target’s annual operating cost will increase by over a billion dollars each year the new minimum wage is in effect.

One of the ways Target may make up the cost of raising the minimum wage is by raising prices on their products, which will decrease the buying power of the dollar and thus accelerate inflation.

Another drawback of increasing the minimum wage is with rising labor costs, companies make cutbacks on labor to minimize unnecessary labor expenditures. According to a study conducted by the Federal Reserve Bank of Chicago, a 10 percent increase in the minimum wage results in a four percent decrease in the number of low-wage jobs available.

In 2016, the minimum hourly wage in Seattle experienced a hike from 11 dollars to 13 dollars. Economists from the University of Washington studying the increase reported a three percent increase in overall wages by low-wage workers, but a nine percent decrease in the number of hours worked by such workers. This resulted in a net loss of $125 a month per low-wage worker on average.

Not only is increasing the minimum wage ineffective in boosting workers above the poverty line, it actually takes money out of the pockets of low-wage earners who need it most.