In recent weeks, I have had the very same conversation with a number of my friends. Each time I’m told that they were participating in a discussion about the minimum wage when someone claimed that there was no point in raising wages because firms would just raise their prices to cover the increase. This is a very intuitive, appealing argument, but it’s deeply misleading and fallacious. Let me explain why.

Continue reading “Misconceptions: Raising the Minimum Wage Does Not Automatically Lead to Inflation” →