Low-income workers will welcome the new year with open arms.
Twenty-one states are set to raise their minimum wages in 2015, bringing the national wage average up to $7.75 per hour, 50 cents higher than the federal minimum wage. The wage hikes will be good for the overall economy, according to an expert.
Christian Weller, a senior fellow at the Center for American Progress, said in a heated interview with CNBC's "Squawk Box" on Wednesday that the U.S. economy will benefit from the raise in wages. "One great positive is greater buying power," he said.
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Weller added the raise in wages will lead to low-income workers spending their money on retail goods. "With higher wages, people are happier at their jobs," he said. "We're talking about the lowest-paid workers in the economy. 90 percent of them are over 20 years, and most of them work full time."
Nevertheless, small businesses and franchises are not happy about the wage hike.
Eighty-five percent of franchises said they will be negatively affected by wage rises, according to CNBC's Kate Rogers. "According to the International Franchises Association, there are more than 770,000 franchises with over 18 million employees nationwide," she said.
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Rogers added that Subway, McDonald's, KFC, Burger King and 7-Eleven franchises will be the most affected by the minimum wage raises.
Weller said that companies will be able to recover from the raises because of the lower turnover of employees it will bring. "There's less turnover, and that increases productivity," he said.
Weller added that companies could also recover through small price increases and minimal profit cuts. "The argument that it has a negative effect on employment assumes that companies have no way of raising prices."