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    MARKET EDGES

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The federal minimum wage will rise to $6.55 an hour on July 24th, the second of three annual 70-cent increases passed by Congress last May. With housing markets collapsing, financial markets in disarray and the economy looking at a consumption recession, the increase in minimum wages could complicate a challenging environment.

Raising the minimum wage over the next two years regardless of changes in economic conditions could accelerate inflationary pressures. In addition to increased labor inflation, restaurants and retailers are among the sectors impacted the most by rising commodity prices and slower consumers spending. If companies try to raise prices to offset minimum wage hikes, on top of current pricing trends, they run the risk of lower guest counts.