- The nominee for Treasury Secretary Janet Yellen said during her confirmation hearing that raising the minimum wage to $ 15 an hour would minimally affect jobs, if at all.
- Republican lawmakers argue that raising the minimum wage would cost the country millions of jobs.
- Democrats support raising the minimum wage to provide relief to workers who have suffered from the pandemic, but it remains a party issue due to its potential effects on the economy.
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Janet Yellen, nominated for the Treasury secretary, said that a $ 15 increase in the minimum wage will not have significant effects on the labor market, responding to the concerns of Republican lawmakers.
At his confirmation hearing on Tuesday, Yellen addressed President-elect Joe Biden’s announcement to raise the federal minimum wage to $ 15 an hour in his stimulus plan. While the plan was widely supported by Democrats and the majority of the public, conservatives said raising the minimum wage would be detrimental to the economy and labor markets across the country. Senator Tim Scott of South Carolina said during the hearing that raising the minimum wage “would close some 3.7 million top jobs, a minimum of 1.3 million jobs in our economy”.
“How can we deal with parts of this package that are really philosophical in nature and deny the practical reality that comes from it?” Scott asked.
The $ 15 minimum wage increase was discussed by lawmakers and economists, with conservative economists citing the same concerns as Scott, Insider reported earlier.
But Yellen said the economic literature shows that an increase in the minimum wage will have only minimal effects on job losses, generally benefiting the economy.
“Researchers often see what happens if a state raises its minimum wage and a neighboring state leaves it alone to see how companies do in two different places with different treatments, and the findings show that job losses are minimal, if any, “Yellen said.
As part of Biden’s $ 1.9 trillion stimulus plan released last week, raising the minimum wage remains a widely disputed issue and will be a component of the plan that is likely to find further debate.
Overall, Yellen and Democratic lawmakers support the increase in an attempt to provide relief to families who have suffered from the pandemic.
“At the moment, we have millions of American workers who are putting their lives at risk to keep their communities running, and sometimes even working multiple jobs and are not earning enough to put food on the table.” Yellen said. “… They are suffering in countless ways, especially during this pandemic and really struggling to survive, and raising the minimum wage would really help many of these workers.”