Question

would raising minimum wage cause an increase in the CPI, creating a cycle on inflation?

Answer 1

yes

Answer 2

Yes only if the minimum wage is above the efficient wage.

Answer 3

Yeah god forbid the upper 1% of society have to pay for something...
Money comes in to the system through bank loans.
Inflation is created by the negative impact of interest on bank loans.

Answer 4

Yes, when the new minimum wage causes people's wage to increase. For a while when there was full employment, the starting wage for fast food was above the minimum wage, so the higher minimum didn't do too much

Answer 5

Raising the minimum wage in the United States provides little benefit. Here's why.

The minimum wage is rates by $1.00. McDonald's increases wages for those making the minimum wage by $1.00. Employees already making $1.00 more than the old minimum wage do not receive an increase. In the months following the minimum wage increase, McDonald's raises the prices of items on their menu. Other businesses do the same.

The company that makes the paper that McDonald's hamburgers are wrapped in must give their minimum wage employees an pay increase too. When their contract is up for renewal with McDonald's they offer a higher bit that to compensate for the increased cost of higher wages. McDonald's decides to accept a lower bid from a company in China.

Those who are retired or living on savings do not get a pay increase. The cost of goods and services they purchase rise.

Minimum wage remains at the bottom and it remains, in many cases, an unlivable wage. When the day comes the the minimum wage is over $15.00 an hour in the United States it will still be an unlivable wage because the cost of everything else rises.

In the end the only people who benefit are those who have authority to spend state and federal taxes. They benefit because higher wages generate more tax income. However, this doesn't last either. They purchase goods and services from the same market as McDonald's. State and federal government eventually increase unemployment benefits, disability payments, etc. Everything rises and then groups lobby to increase the minimum wage because the current wage is to low.

It's a damaging cycle. Yet if an incumbent elected official votes against the increase ad campaigns during the next election will say, "Senator Brown voted against pay increases for Americans living below the poverty line." So Senator Brown's office recommends he vote for it if voting for it can get other measures passed that benefit areas of interest to his supporters. Thus avoiding possibly sound bite attacks and off setting some of the impact of the increase. Perhaps agreeing to the increase only if a set percentage of the additional tax income is diverted to a government program the senator supports.

Again, a damaging cycle that takes and doesn't give.