IMF to USA: Raise The Minimum Wage
The International Monetary Fund (IMF) warned the United States on Monday that it must take a series of measures, including a raise of its minimum wage, to strengthen economic growth.
The global crisis lender slashed it annual economic growth forecast on the world’s largest economy from 2.8-percent to 2.0-percent this year, due mainly to an unexpected first-quarter contraction.
The American economy would likely rebound to 3.0-percent growth next year. To ensure that, the government should take a series of steps that include raising the minimum wage and investing in infrastructure rebuilding.
IMF managing director Christine Lagarde stepped into the middle of an ongoing debate about raising the minimum wage in America by siding with her political ally, U.S. president Barack Obama, on the issue.
Echoing those arguments laid out by the Obama administration, Lagarde said American wages have fallen sharply over the past decades, locking millions in poverty. Raising the minimum wage “would help raise incomes for millions of working poor,” Lagarde said in her report.
“The US should invest in its future… The priority is to invest in people and to invest in infrastructure,” Lagarde said. “There is no single measure that is going to deal with all those issues.”
Lagarde stopped short of endorsing the Obama administration’s call to raise the minimum wage from its current US$7.25 an hour to US$10.10 an hour, saying the increase “needs to be decided by legislators.”
The IMF also the U.S. Federal Reserve should not expect the economy to get back to full employment before the end of 2017, and should hold interest rates at their current record-low levels past the middle of next year, when the Fed has signaled it would raise the rate.