Minimum Wage Goes Up Today! Buy Yourself 0.175 Gallons of Gas!

The Federal minimum wage lurches up 70 cents today, from $5.85 to $6.55. As the title mentioned, that's about 1/5 a gallon of gas at $4/gallon. By next year, the minimum wage will be at a respectable $7.25 an hour. But given the rapid deterioration of the dollar and consumer confidence in a tailspin, the idea of the MW going "up" may be a little misleading. From the AP:

Last week, the Labor Department reported the fastest inflation since 1991 — 5 percent for June compared with a year earlier. Energy costs soared nearly 25 percent. The price of food rose more than 5 percent.

So the minimum wage hike is "a drop in the bucket compared to the increases in costs, declining labor market, and declining household wealth that consumers have experienced in the past year," Lehman Brothers economist Zach Pandl said.

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

$10.06 in 1968?! I always wondered how those slackers bought all the doorway beads and pot.

But the new wage level isn't just too low to help the workers. It's too high to help small businesses. The AP again:

David Heath, owner of Tiki Tan in College Station, Texas, said the increase will force him to raise prices for his monthly tanning services by about 12 percent. Tiki Tan had been paying its employees $6 per hour.

"There just isn't any room for profit, and so this is why prices will have to go up," he said, citing the wage increase and higher fuel costs. "I have to recoup those costs."

The increase in the minimum wage could push food prices even higher by rising the pay for agricultural workers, said Brian Bethune, chief U.S. economist at consulting firm Global Insight.

But he said he did not expect the change to have a major impact on the economy because recent increases in productivity, which enables companies to produce more with fewer workers, are keeping labor costs in check.

Wha? Seriously? Did the chief U.S. economist at Global Insight just say the only thing holding the economy together is unemployment? Awesome.

If anybody - anybody - out there has a solution to this, please tell me. Or just call the President. Scratch that - tell me. I want this to get done soon.