Saturday, November 04, 2006

Minimum Wage and Inflation

OK, so AZ Prop 202 (and similar propositions in other states) would increase the minimum wage to $6.75 (an increase of over 30%) and set up a yearly increase based on inflation.

Doesn't this create a feedback loop? Increasing the minimum wage will increase inflation which will.... Can someone explain why it won't work this way and/or why this is not important?

I mean, I support having a minimum wage and it makes sense to increase it every once in a while and small increases would create less havoc for employers but I'm just working myself into a corner here, aren't I.


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