President-elect Joe Biden’s newly revealed effort to lift the minimum wage to $15 an hour is sure to face stiff resistance among Republicans and many in the business community. But some economists say it wouldn’t be too harmful to the economy (think lost jobs) as higher spending among consumers helps offset the burden on businesses paying out the higher wages.
“I mean generally, I support higher minimum wages but I have had reservations that you could have them be too high,” veteran economist and founder of the Center for Economic and Policy Research Dean Baker said on Yahoo Finance Live.
Continued Baker, “We have seen big increases in the minimum wage in New York, California and a number of other states and some cities like Seattle, and really no negative impacts on unemployment or employment. Now that doesn’t mean that there is not going to be some businesses hurt or some that will go out of business, that happens. But the question is, what’s the net effect? And all the evidence is that the increase we are talking about that should not have negative impacts economy-wide.” Read more…..
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Governments will have to deal with the economic fallout from the pandemic for decades to come. If they get their response wrong, countries risk economic stagnation and political division.
