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What happens if you tie the minimum wage in the US to the poverty line? Say the minimum wage has to break down to Poverty Line + 5% for a full-time worker.
This really represents two changes (that I can see) and we can take them separately:
1) Obviously it means the minimum wage is going to be affected in real dollar terms.
2) It means the minimum wage is changed on a regular basis, every time the poverty line is announced. This is something not currently done.
So what would be the economic consequences of this action? Inflation? epidemic under-the-table payrolls? What are your thoughts?