Inflation and minimum wage

Discussion in 'Economics' started by The Kin2, Jul 30, 2006.

  1. Will an increase to $7.50 in the minimum wage increase inflationary pressure?

    If so, will Helicopter Ben raise rates to keep inflation in check?

    And is the inflation being reported a true gauge of the inflation rate in the economy?
  2. Chagi


    My take on this issue is that many companies are already frequently paying higher than minimum wage by the time that governments get around to raising wages, depending on employement market conditions. I would also suspect that inflationary pressure is present to a greater degree with middle-class and higher incomes, not the lowest paid category of wage earners.