Is the minimum wage really the culprit behind inflation? Not necessarily. From an economic perspective, the situation is much more complex.

When prices continue to rise, workers' purchasing power is eroded. Companies, in order to retain talent and maintain labor supply, are ultimately forced to raise the minimum wage — this is a natural market response. In other words, an increase in the minimum wage is often a result of inflation that has already occurred, rather than its cause.

Many people have reversed the cause and effect. Inflation drives up commodity prices, and wages adjust accordingly; rather than wage increases causing prices to soar. This is especially important for understanding the current economic cycle. From monetary policy, supply chain shocks, to commodity fluctuations, the true drivers of inflation are much more complex.

Next time you hear the claim that "the minimum wage pushes up prices," consider asking: did wages rise first, or did prices rise first? Economic data often hold the answer.