Minimum Wage Regression

Jadro 1 John Jadro Webonomics Mr. Haessler 17 February 2000 Minimum Wage Regression The proposed increase in minimum wage will do a number of things to the economy. The greatest effect it has will be on inflation. There is a strong correlation between raises in the minimum wage, and raises in inflation. The effect of raising the minimum wage on employment is very little. The correlation between an increase in inflation, and an increase in unemployment is weak …

…again, is an inaccurate indicator. Increases in inflation have almost no effect on unemployment, as shown by the model. These three relationships show a chain of events. When the minimum wage is increased, inflation will go up as well. This does not necessarily predict an increase in unemployment. An increase in inflation does not necessarily predict an increase in unemployment either. Basically, an increase in minimum wage will most likely predict an increase in inflation.