Quote Originally Posted by tokinggreg

2) Yes, prices will rise with the rising costs for the restaurant owners, and these costs will be bore by the consumers. But consider, less people start eating at restaurants because it becomes too expensive. Say now instead of eating out 4 times a week, they cut back to once a week and cook the other days (realize food prices haven't changed, just labor prices). Restaurants will be forced to cut their costs until the prices are cutthroat, and competition will drive down price not quite as low as it was before, but almost as much.
this would be a true statement, but you have to consider that food prices are going to be changing aswell [consider the farming jobs].

anyway, the end result of a shift in the supply of goods [b/c of rising costs] and will drive up the prices and they will stay at that price. the way to counteract this effect would be to raise money-wage rates [companies will pay ppl more, it will eventually work out... "the invisible hand type stuff"]...

so basically it will eventually work out to be essentially the same cost for things [income/prices ratio], but it will take awhile, and we will see the burden with very high inflation spikes in the meantime.

bottom line: this is a foolish thing to do, the economy is currently good and it will change