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A raise in the minimum wage causes a significant increase in the cost of living. Although less the 1/10 of 1% of people are paid just the minimum wage there are numerous employment contracts tied to that number. An example in a collective bargaining agreement may state a particular job will pay 3,4 or 5 times minimum wage. So if minimum wages increased by 25 cents per hour that contract would automatically pay 75 cents to $1.25 per hour morecausing goods and services to increase in order to compensate.

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