International Monetary Fund Director Christine Lagarde Supports US Minimum Wage Boost to Help Low Income Families
The International Monetary Fund has called on the United States to raise the nation's minimum wage.
IMF Managing Director Christine Lagarde said a boost in the federal minimum wage and expansion of the Earned Income Tax Credit would alleviate and raise incomes of Americans along the poverty line. According to the IMF's "2014 Article IV Consultation with the United States of America Concluding Statement of the IMF Mission," almost 50 million Americans live in poverty, more than 15 percent of the population.
The IMF stated the current minimum wage is at a "low level" compared to both international standards and U.S. history.
Largarde said, "Given the other numbers that I've mentioned, the 50 million Americans living below poverty levels, and the number of unemployed people, we believe that an increase of that minimum wage would be helpful from a macroeconomic point of view."
The IMF managing director did not provide a recommended minimum wage. While she is aware of the $10.10 proposal in Congress, Largarde said the choice needs to be decided by lawmakers.
According to the National Council of La Raza's Deputy Director of Civic Engagement Loren McArthur, 43 percent of Latino workers earn poverty-level wages.
"The current minimum wage of $7.25 per hour is not enough to keep a single parent with one child out of poverty," McArthur wrote. "Congress has introduced but has not yet passed legislation to raise the minimum wage to $10.10, which would make it easier for approximately 6.8 million Latinos, or nearly one-quarter of the Hispanic workforce, to take care of their families."
McArthur added that dozens of states are also considering minimum wages increases, which Largarde also recognized during a press conference about the Article IV Consultation report.
Congress has been at a stalemate over the minimum wage debate. President Barack Obama has moved ahead with plans guaranteeing federal contract workers the $10.10 per hour wage. Meanwhile, Seattle approved a $15 an hour minimum wage bill, which is the highest among major U.S. cities. By 2018, Maryland will increase its minimum wage to $10.10.
Largarde also revealed the IMF revised projections for U.S. economic growth down by 2 percentage points. The IMF's decision was "largely attributed" to the "poor results" from the first quarter of 2014.
"It's not the main message that we want to give on growth. We believe that this slowdown is temporary and better prospects lie ahead. We are saying that on the basis of employment numbers and the indices of industrial production that are showing gaining economic momentum," Largarde said.
The IMF managing director said "scars" from the recession still exist in the U.S. The first scar is the "too high" long-term unemployment level, which was reported at 3.4 million people.
"Labor force participation is also low, too low, as too many productive workers have simply stopped looking for work," Largarde stated.
The third "scar" is the nearly 50 million people living below the poverty line.
The IMF has projected a 3 percent economic growth, and unemployment levels could drop to 5.9 percent for the U.S.in 2015.
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