Inflation and the Minimum Wage

This article here states that a new minimum wage has been set and will increase to $7.25/hour by 2009. These articles here and here discuss how, contrary to some opinions, inflation is not affected by minimum wage increases. So how what is the relationship between the two?

"In the past decade, inflation has depleted the value of the minimum wage to the lowest level in more than 50 years," according to the first article. It seems that minimum wage increases are actually symptoms of inflation, not the other way around.

The other two articles discuss how inflation is affected by monetary policy enacted by the FED, and that the real pain of minimum wage increases are the workers that are the least employable. If an employee was barely worth the previous minimum wage, they do not 'magically' produce all of a sudden in a manner worthy to be compensated at the new wage level. Many of that group will loose their jobs if their employer cannot afford to pay the new wage.

Hence, the law that was passed to 'help the poor and less fortunate' may actually be hurting them, especially since the indicated inflation is already devaluing the few dollars they had before they were unemployed.

Minimum Wage Increase May Not Cause Inefficiency

CNN (http://www.cnn.com/2007/POLITICS/02/16/minimum.wage.ap/index.html) and other news sources have reported on the House and Senate passing a bill that would increase the minimum wage from $5.15 to $7.25 over the next two years. Minimum wage is clearly a price floor, which can cause an inefficiency in the market if it is set above the free-market equilibrium. I do not think the minimum wage increase will affect the market equilibrium. Most people in the lowest income bracket are already being paid above minimum wage. Even companies in Cedar City -- like Smead, Convergys, etc -- who primarily hire unskilled individuals without a college education, are paying above minimum wage. Also, many states have higher minimum wages -- also called living wages. I don't think the increase to $7.25 exceeds the free-market equilibrium and should not cause excess supply of labor. I think that the only companies that may see an excess supply of labor and a higher labor cost is fast-food restaurants, which primarily hire high school students at the minimum wage.