Will the minimum wage increase help or hurt the US economy?

In the current economic climate, with so many other issues already chipping away at the US economy, the 70 cent minimum wage hike will have absolutely no effect whatsoever. Independent of skyrocketing gas prices and retail price increases the highest in 30 years, the increase may have had an impact one way or the other, but it won't even cause a blip on the economic radar now.

The only effect the 70 cent minimum wave hike has noticeably had so far is to contribute to higher unemployment rates and higher retail prices. So, the money the people who received the pay increase could have used to put back into and stimulate the economy is being negated by these two things. When you adjust for inflation, spending is actually down, even though you're paying more at the grocery store. So, if you brought home an extra 20 dollars on your paycheck by it was eaten up because of the fact that the same groceries you bought last week cost you 20 dollars more this week, the effect on the economy, as well as on your personal line, is a big zero.

The nation's employers and retailers did exactly what we knew they were going to do. They whined and moaned about how the increase was going to devastate their bottom lines. Then, when they became effective, they cut workforce and raised prices to offset what they considered huge payroll expenditures, effectively shooting themselves in the foot. Had they had the courage and foresight to weather a brief storm of a potential dip into their significantly deep pockets, they could have regained even more later because those working people who have been struggling for so long may have actually started spending some of that extra money and stimulated the economy.

Instead of allowing it to be a good thing for them in the long run, employers and retailers have effectively dashed the hopes of the pay increase doing anyone any good. They raised their prices to recoup perceived losses, making that extra 70 cents no longer extra, but necessary for people to stay at the same stagnant economic level they were at before. We have no more discretionary income than we did before the minimum wage hike went into effect, so we have no way of effectively stimulating the economy. This will cause the retailers to see even further drops in sales after adjustments for unnecessarily high inflation levels.

The answer to this question may have been much different before we dropped into the recession that no one will call a recession. However, this nation's employers and retailers have created their own self-fulfilling prophecy by setting into motion a series of job cuts and price increases that will cause the 70 cent minimum wage hike to do absolutely nothing.