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REGINA -- Minimum wage is increasing in Saskatchewan on Tuesday.

The new minimum wage is $11.32, up from $11.06.

It's set each year by a formula that tracks the consumer price index, or inflation.

Economics professor Jason Childs says the increase won't have a huge impact on local businesses.

"It's going to hurt a little bit, but not that much," he told CTV Morning Live on Tuesday. "We're talking about a $0.25 per hour raise, so it shouldn’t have a huge impact on business and it's not going to be life-changing for the employees either."

Since the increase tracks with inflation, most minimum wage employees will remain in the same position as they were last year.

"It's just keeping them in that same spot," Childs said.

Even with the increase, Saskatchewan continues to have the lowest minimum wage in Canada.

When looking at increasing minimum wage, Childs says it's important to look at both sides of the debate.

An increase could lead to a reduction in the number of hours worked, and split the minimum wage labour force.

"Those with experience, they tend to do well out of increases in minimum wage," Childs said. "The new workers, no. They tend to lose out and often get completely shut out of the labour market. So, there's a lot of back-and-forth here and a lot of movement."

Alberta has the highest minimum wage in the country at $15 an hour.

Increases to minimum wage are announced by June 30 each year and come into effect on Oct. 1.