Quote:Several factors cause that kind of inflation.  There's no single root cause, and most economists agree on that, no matter what else they disagree on.  The minimum wage has little real effect on inflation.  Raising minimum wage 40% would not result in a 40% inflation jump for example.  In fact it'd be much smaller.  And a little inflation is a good thing.  The reason minimum wage doesn't cause such a great jump in inflation is because wages aren't really that high a percentage of prices.  

 

Then you have a lot of artificial supply limitations like in the housing market, where they don't put vacant houses on the market.  Why?  To drive the cost up, of course.  Just look at how people go wild for things like Tickle-me-elmo.  Or the newest game system, how you can buy 3 of them, and sell the other two to make up the cost.

 

In an ideal world, companies would pay you what you are worth, not what they want to pay you (which is the least they can get away with, and still have employees).