International Monetary Fund Supports Minimum Wage Increase
by Jessica Schieder, 6/17/2014
This week, the International Monetary Fund (IMF) joined the chorus of voices supporting a U.S. minimum wage increase. The IMF noted that raising the wage should be a part of a policy agenda to “fortify the country’s economic future.”
The IMF stated the minimum wage was low “compared both to U.S. history and international standards” and that raising the wage could play a crucial role in fighting poverty. Despite positive economic impacts and the American public’s strong support for a minimum wage increase, congressional Republicans have blocked efforts to raise the wage.
The IMF’s report is part of an annual assessment the organization carries out, which functions like an annual “wellness check” and lays out its analysis of growth potential in the United States. In the same report, the IMF’s growth projections for the United States were lowered to two percent for 2014, down from 2.8 percent.
Among other recommendations, the report called on the United States to invest in infrastructure and education, raise more revenue and improve the tax system, and put Americans back to work. In summary:
To achieve these goals and fortify the country’s economic future the policy focus should be to undertake more proactive labor market policies that lower long-term unemployment and raise participation; increase the minimum wage while strengthening the Earned Income Tax Credit; invest in infrastructure; improve the tax structure and raise revenues; fundamentally reform social security; and lower the growth of health care costs.