macleod:

You would think, but basic economic theory does not apply.

First, the impact on the economy that this will have -

If the minimum wage were to go up, it has been found to create more jobs, and create more spending in the economy.

When low-wage workers get a raise they usually spent it rather than stock it away in a mutual fund. In many cases, they will spend the money in the same places that hire a lot of low-wage workers: They spend it in fast food restaurants and low-end retail chain stores which account for many of America’s minimum wage jobs. So these stores get more business, which offsets much of what they lose by paying higher wages.

A 2006 study from the Fiscal Policy Institute found that states with minimum wages above the federal level had faster small business and retail job growth.

Now onto your question pertaining to higher prices -

A ten percent increase in the wage is associated with only a 0.4-0.7 percent increase in prices.

If prices increased to the maximum, that means there is a 9.3% difference, which means there is a 9.3% more money than you would have.

Which means we go from a $7.25 minimum wage to $7.97 minimum wage, a measly 70cent increase.

Let’s say prices increase to that maximum of 0.7% -

Currently: A hamburger costs 5$ (including tax) and you only have 50$ on you. You pay for the hamburger, you now have a hamburger and $45;

Minimum wage increased: That same hamburger will now cost $5.35, and you will have 55$ on you (due to the increase). You pay for that hamburger, you now have a hamburger and $49.65, a near five dollar increase.

I mean a minimum wage increase of only 70 cents sounds pretty great, doesn’t it? Now imagine it at 10.10, and I hope you understand how great that is.

You should also read these posts about this:

The Economic Policy Institute released a report estimating that raising the federal minimum wage to $10.10 an hour, up from $7.25 today, would add an additional 85,000 jobs to the economy on top of all the jobs we have now.

Raising the minimum wage creates jobs.

This wage increase will do so much more good than it ever could do harm.