Manage HR Magazine | Friday, October 15, 2021
FREMONT, CA: According to the Economic Policy Institute, raising the minimum wage during the coronavirus pandemic is a smart policy. Corporate America is slammed by the coronavirus recession. More than 45 million people were cut from their employer’s payrolls and business group have turned their focus to planned minimum wage increases, dressing cuts and state officials to postpone them.
According to EPI, the coronavirus recession has not changed the case raising the minimum wage, rather it has highlighted its importance. Raising wages for low wage workers, the portion of the workforce that will spend a large share of their income, boosts overall consumer demand. According to EPI research, business owners, corporate shareholders and higher-income earners have more likely to prioritize saving a portion of bump in pay.
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
The biggest challenge businesses face amid the coronavirus recession are lack of demand, rather than excessive labor costs. Raising the minimum wage would help solve the demand problem more effectively than other recession response measures. According to EPI, the most effective policy response would be to allow minimum wage increases to continue as planned inorder to boost consumer demand, while also offering small businesses further support such as deferrals, loans, and rent subsidies that could help them survive the coronavirus pandemic.
More in News