President Barack Obama recently signed an executive order that raises the minimum wage for workers under new federal contracts to $10.10 an hour, from $7.25, effective in 2015, which will affect 2 million employees according to the White House. He also called for a federal minimum wage rise to $9 per hour.

The public has had mixed reactions toward the executive order. Many hailed it as a move likely to push forward a minimum wage hike for all Americans, while some business owners expressed worries that it might increase the cost for business owners and discourage them from hiring more workers at a time when job growth is crucial to the slowly recovering economy.

Five states passed minimum wage increases last year, including California. California Governor Jerry Brown signed a bill, agreeing to boost the state's minimum wage to $9 an hour by July 2014 and to $10 an hour by January 2016. The pay rise would increase a full-time worker's annual income by $4,000 on average, said the governor's statement.

More recently, Maryland's legislature, approved raising the state's minimum wage to $10.10 an hour starting July 2018, from the current rate of $7.25, following a similar step last month by the Connecticut legislature, which raised the minimum rate to $10.10 by 2017.

According to the White House, the higher wage will attract higher-quality workers who are more productive and will thus reduce turnover, which can significantly offset the cost of providing higher wages. Moreover, government agencies will not increase funds allocated to contracts to absorb higher wages, because the contractors will see better productivity from their workers to cover the costs, Labor Secretary Thomas Perez was cited by Politico.com as saying.

However, some labor-intensive industries, such as restaurants, are likely to face higher costs. Qiang Lu, a business owner based in Los Angeles, said  that the increase in the minimum wage increases the cost of running a company and will impact profit margins. He said  many business owners will have to consider laying off employees to cut costs.

On the other hand, Cheng Lu, the CFO of a logistics corporation based in LA, said that the current minimum wage in California is higher than the federal standard and any future nationwide minimum wage will not have much impact on the state.

But Californian workers who receive no tips are still looking forward to the rise. An employee, surnamed Li, who works at a fast food restaurant in Los Angeles, said that she has little chance of receiving tips, and the increased pay is important to her.

Raising the minimum wage from $7.25 an hour to $10.10 is both a legislative priority for the president and a liberal policy proposal that could help the White House hold on to Democratic seats in Congress in a difficult midterm election year, the New York Times noted.