Media clips
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King’s image of saddling “our grandchildren” with budget debt was challenged by Josh Bivens, an economist with the Economic Policy Institute, a national progressive think tank. Bivens said future generations will likely fare worse if Congress fails to respond to the magnitude of the economic crisis caused by the pandemic and follows centrist senators’ demands to curtail deficit spending.
“I think the King formulation is super simplistic and really misguided right now,” Bivens told Beacon. “It is an absolute slam dunk that deficit financing another round of COVID relief will make our kids richer, not poorer.”
Bivens argued in a Jan. 14 blog that policymakers should ignore criticisms by some GOP “deficit hawks” who claim a substantial federal stimulus will “overheat” the economy — meaning an influx of federal money will crowd out private investment and drive up inflation and interest rates, ultimately leading to a decline in economic output. Bivens argues that economic overheating is far off.
“The U.S. economy has run far ‘too cold’ for decades, largely due to the enormous rise in income inequality redistributing income to richer households that save most of their income. Unless inequality is substantially reversed, economic overheating is highly unlikely,” he wrote, adding that Biden’s proposal “is highly unlikely to cause economic ‘overheating’ — and it would be a sign of its success if it did.”
Bivens has also previously explained how arguments about the deficit, such as King’s claim that such spending is akin to “borrowing” from future generations, are misguided.
“Rules that apply to households about debt don’t apply to the U.S. government. People often claim that because households reduce spending during tough times as a precautionary measure, the federal government should too. But this is a terrible analogy,” he wrote in In These Times in April 2020, as the economic impacts of the pandemic were becoming apparent. “In fact, the federal government should take on more debt exactly when households are trying to take on less.”
Maine Beacon February 1, 2021 -
Another study from the Economic Policy Institute, a left-leaning research group, and shared with CNBC, found that a $15 minimum wage would reduce expenditures on public assistance programs by $13.4 billion to $31 billion. It would also boost payroll tax revenue by $7 billion to $13.9 billion.
“These are sizeable figures that would have a meaningful impact on the federal budget,” said David Cooper, who co-authored the EPI report with Ben Zipperer and Josh Bivens.
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But the CBO’s estimates about job losses are more negative than expected, according to Ben Zipperer, an economist at the Economic Policy Institute.
“The benefits of the policy far outweigh the potential costs,” he said, adding that it would also help the most vulnerable Americans hit by the pandemic, especially people of color. An EPI analysis of the 2019 Raise the Minimum Wage Act found it would help 25% of Black workers and 19.1% of Hispanic workers. By comparison, it would affect 13.1% of White workers and 10.8% of Asian workers.
CNBC February 1, 2021 -
NPR’s Lulu Garcia-Navarro asks Economic Policy Institute Senior Economist Elise Gould about the pandemic’s economic effects on women and minorities.
NPR Weekend Edition February 1, 2021 -
“There are now 26.8 million workers—15.8% of the workforce—who are either unemployed, otherwise out of work because of the virus, or have seen a drop in hours or pay because of the pandemic,” Heidi Shierholz, an economist at the Economic Policy Institute, wrote earlier this week. “Further, we started losing jobs again in December.”
The New Yorker February 1, 2021 -
Another report, produced by three economists at the Economic Policy Institute, a liberal think tank and a longtime advocate for increasing the minimum wage, found that there would be “significant and direct effects” on the federal budget by increasing payroll tax revenue by $7 billion to $13.9 billion and reducing expenditures on public assistance programs by $13.4 billion to $31 billion.
“This is a sizable chunk of money, no matter how you look at it,” said David Cooper, who wrote the report with Ben Zipperer and Josh Bivens. They determined that increased revenue would prevent many workers and their families from qualifying for assistance programs, reducing expenses.
New York Times February 1, 2021 -
February 1, 2021
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About 4.5 million Texans’ wages could benefit from a minimum wage increase to $15 an hour, according to 2019 data from the nonprofit think tank Economic Policy Institute. And while there is mostly consensus that $7.25 an hour is not a livable wage, economists and independent analysts don’t universally agree on whether raising it would be a net positive for the Texas economy.
The Texas Tribune February 1, 2021 -
Articles on minimum wage:
Minimum Wage Tracker, from The Economic Policy Institute
NPR Planet Money February 1, 2021 -
The nonpartisan Economic Policy Institute (EPI) notes that the federal minimum wage has not changed for a decade — the longest it has remained the same since the minimum wage was established in 1938. According to the EPI, the increase would affect some 32 million workers, representing 21% of the U.S. workforce. Not only would the change overwhelmingly benefit essential workers, it would work to close the racial wealth gap; EPI says that 31% of Black workers and 26% of Latino workers would get a pay raise if the higher minimum wage takes effect.
Next City February 1, 2021 -
David Cooper, a senior economic analyst at the labor-backed Economic Policy Institute, told me the phase-in schedule was “perfectly reasonable” and agreed businesses need time to adjust without negative consequences.
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David Cooper, the labor-backed EPI economic analyst, acknowledged this issue but agreed with policy that gradually reaches $15 by 2025. “What experience with higher minimum wages and a lot of research has shown, when you phase in increases over time, businesses are able to adjust without there being any of the dire consequences that opponents always claim are going to happen,” said Cooper.
He was hopeful about future legislation, adding, “There’s nothing that says we have to stop at $15 once we get there.”
Jacobin February 1, 2021