Does raising the US minimum wage to $25 risk causing hyperinflation?

[SeekerOfTruth007]

Recently, someone proposed a $25 minimum wage on the Federal Senate floor. I had a dream that should this measure pass inflation will become so bad that minimum wage employees still won't be able to make a living, and McDonalds will start charging a "Pre-Tip" to even order your food. In the dream, to order for 4 people, you had to pay a pre-emptive tip of $53 before a server would even take your order... and you were expected to tip again after the meal too.

This is now the second hyper-inflation dream I've had in the past few years. The other one forecasts the price of Concrete going to $375 per cubic yard, which will make the price of building a home or business, or maintaining roads, levees, and bridges, etc, extremely cost-prohibitive, which might actually be the Democrats intention all along, since they want to ban concrete in the first place.

A few years ago, a guy on Youtube was telling a dream he had, in which he said coin change was done away with at the Banks and you could not change dollars for coins. He then asked the teller in the dream what to do to make change. The teller told him to round to the nearest dollar. This is because inflation will devalue the coins we have completely. We are already part-way there now, since businesses are now rounding transactions to the nearest 5 cents to do away with the Penny.

[Effably]

It would most likely have less of an inflationary impact than the Iran war.

We're realistically talking about 0-1% inflation. Even a worst case prediction is 1.5% and at that point you'd have economists thinking you're unreasonably overestimating it.

Actual field studies suggest no inflation will occur unless artifically made as a reaction. See the food price hike in response to the Ukraine war where a very small price increase was used as an excuse to manipulate the market for a massive profit gain.

The dominant view in the field is that it'd be pretty mild inflation and less impactful than half the issues the last few years.

Hard to say what is good or bad objectively in an economy but if the people wanted to do this they could and it would not cause much trouble at all. The main risk is potential price gouging from opportunists. The actual impact again, would be very minor.

It has to be understood that money going to the poorer part of a society almost never leads to any bad outcomes as it is promptly spent ans put back into the economy. What needs to be avoided is money going to people who will not spend it as that causes actual and lasting harm.

To clarify there is no issue being a millionaire, billionaire or trillionaire. There is a significant issue sitting on money for interest. But as long as it is spent it is a net-neutral to net-positive.

[AviatorTom]

Not hyperinflation, that would most likely cause small businesses to close some of their stores or go out of business, exactly like what is happening in California when they raised the minimum wage for service workers.

Minimum wage was never intended to be a living wage, and people should stop thinking that it is. Minimum wage is intended to be a reasonable starting wage, while encouraging people to advance themselves and get raises and higher paying jobs. A high minimum wage discourages that, making people satisfied with a low income, which is bad for business, the economy and workers.

[indissoluble]

It promotes automation and unemployment not hyper inflation. Employers aren't going to pay $25 an hour for minimum wage type work. In Democrat states that keep pushing the minimum wage, they are already making fully automated fast food places that now lack dining rooms and just have a walk up window and a locker system for delivery services like an automat. The franchises are now run by 1 person, and that is either the owner of the franchise or their hired manager. That is the direction you move when you make unreasonable demands of business owneers.

[indissoluble]

https://www.youtube.com/shorts/Z_PDudEMwjA

[indissoluble]

Same thing has been happening with banks. Now they just have random ATMs in the middle of parking lots and they have bank lobbies with a video screen to a call center in another state to handle bank customer service. That's the direction high minimum wage is pushing business. No employees on site.

[Ariesman81Nshiiit]

It will. It will force the fed to print more money. It does absolutely nothing to address the problem.

It is the same scheme that led to the roaring 20s. They made a precious a commodity (money) more easily accessible. Sure it felt good and things appeared to be going well. Well, until that great depression thing.

You cannot create something from nothing. It doesn't work.

[genericname85]

as far as i understand, all "minimum wages" do is 3 things:1. briefly give low income individuals a tiny bit more money untill 2. inflation basically makes the increase feel like nothing and 3. increase prices of domestic products to the point where they can't compete with import products anymore in the service industry it's not that bad but there i think it increases moonlighting.

[strateguy632]

yes obviously. and employers would fire half the staff to protect profits.

[Ariesman81Nshiiit]

Or companies will do as they've always done and pass the cost onto consumers. And hell, since hamburger flippers are making more money, they can afford it.

[Tomislav7]

States with small economies will be devastated, states with large economics will downsize workforce, increase costs to make up the loss in paying $25/hr

[Anonymous]

Nah, just genocidal mass executions


Why pay staff or run unemployment when the mulching machine is available

[fishbone77]

of course. and more people will be displaced by automation.