FWIW... Here's what the conservative Cato Institute has to say about this:
Originally Posted by keepngoal
Some opponents of the minimum wage argue that it aggravates inflation by pushing up the costs of individual businesses. Those businesses, unwilling or unable to absorb such costs, pass them on to consumers in the form of higher prices. In this view, any artificial increase in labor costs can produce so-called cost-push inflation.
There are several problems with the notion of cost-push inflation. The primary error in this analysis is that it confuses a shift in the structure of relative prices with a general rise in the level of prices. If the labor costs of businesses are increased and they succeed in passing on the costs to consumers in the form of higher prices, they will have managed to change the structure of relative prices at the expense of businesses that are unable to raise their prices because of more-intense competition. This is quite distinct from a general increase in the level of prices, which would be possible only if the real supply of money was increased.
When prices increase, it won't be due to changes in the minimum wage. In the near run, the biggest impacts will be:
- Increasing energy prices. E.g., oil is at $80/bbl.
- Devalued dollar. The dollar is falling against other currencies, making imports on which we heavily rely (e.g., oil, Chinese products) more expensive.
My 3 cents worth (sorry, adjusted for inflation).