Does raising minimum wage cause inflation?

[Stemis516]

raising the minimum wage does not cause inflation, at least not in the sense that i use the word. raising the minimum can raise prices though. if a company has 20 workers working at $5/hour and minimum wage is brought up to $5.50, some changes will have to be made. this is where the good nature of the minimum wage law goes wrong. how will the company compensate for this price control on labor? one option is to raise the price of their product and keep all their workers. another is to fire 2 workers, keep the price of their product at the same level, and lower production. in other words, minimum wage laws kill production.

in the way that i understand it, thats how they measure inflation...by looking at price levels

Stemis516 Reviewed by Stemis516 on 03-27-2009. Does raising minimum wage cause inflation? We raise minimum wage in order for people to afford to live, but does raising minimum wage actually encourage inflation? I have yet to come up with a definitive answer to this question. When cost of living increases, people need to make more in order to adjust, but at the same time, when the wages goes up, the cost of living tends to go up with it. Do landlords and the like raise prices because the consumer can afford to pay them again. Basically, we seem to increase minimum wages in Rating: 5