Misconceptions Of Raising Minimum Wage In California

Minimum Wage Understandably, there are many misconceptions about the raising of the minimum wage in California and its social and economic effects. Just like many political topics, whether to raise the minimum wage or not is a very divisive issue. Some believe it is necessary to keep pace with the cost of living. Some believe wages will set themselves naturally to the market. If raised, how will increases in wages and costs for doing business impact inflation? At what point do business get hurt if at all. Is there any affect on higher wage earners and those with higher educations? There is no clear evidence that increases in the minimum wage spark an increase in inflation. While the raise of minimum wage can sometimes hurt small businesses, it will help combat inflation and help give a financial boost to hardworking adults.

On account of the increased wage, employers of businesses struggle with the increased cost of labor. This leaves them few options such as letting workers go or raising the price of their product. For example, “Former McDonald’s CEO Ed Rensi says a higher minimum wage will cost jobs and lead to the closing of many small businesses. In theory, raising minimum wage forces businesses to raise prices, which spurs inflation. But since wages are only part of the product costs that consumers pay, it’s not that simple.” (Investopedia, par. 2) So it is safe to say, that although minimum wage seems like it causes inflation through businesses’ need to raise prices, it is not the